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U.S. Department of State
1997 International Narcotics Control Strategy Report, March 1998

United States Department of State

Bureau for International Narcotics and Law Enforcement Affairs


Europe and Central Asia

LUXEMBOURG

I. Summary

Luxembourg is an important international banking and financial center with over 230 international banks and investment houses represented. The Government of Luxembourg (GOL) works aggressively to deter money laundering by drug traffickers. In 1997, the GOL and banking community continued to work together to expand money laundering laws to cover other criminal activities as well as narcotics trafficking. Illicit drug production and trafficking do not pose significant problems for Luxembourg, but small amounts of drugs transit the country. GOL authorities believe there are relatively few drug users in Luxembourg, but remain concerned about drug abuse, particularly among the youth.

The diversion of precursor and essential chemicals to illicit drug manufacturers is not a significant problem in Luxembourg. Luxembourg has a comprehensive chemical control law and is in compliance with the EU's directive on chemical controls.

II. Status of Country

The GOL does not compile statistics on drug abuse. However, authorities estimate that in 1997 Luxembourg had approximately 2,000-2,500 hard drug users and at least 10,000 cannabis users.

III. Country Actions Against Drugs in 1997

Policy Initiatives. In 1997, the GOL continued its institutionalized methadone program, as well as its "Mentor Assistance Program," and various drug treatment programs.

Accomplishments. The GOL has proposed legislation to strengthen its anti-money laundering laws by broadening the penal code's definition of illegal money laundering to include laundering proceeds derived from any criminal activity, rather than just narcotics-related activities. Bank and government officials also reached agreement on the establishment of "Indicators" for suspect bank accounts.

Law Enforcement Efforts. In 1997, Luxembourg authorities arrested or detained a total of 1,368 persons for drug-related offenses. Seizures in these cases netted the following quantities of drugs: 1.6 kilograms of heroin; 10.3 kilograms of cocaine; and 3 doses of LSD.

EU Presidency. During its presidency of the European Union (EU) during the second half of 1997, Luxembourg brought together for the first time ministers responsible for health to discuss an integrated approach towards the drug problem. Luxembourg also sponsored two seminars on synthetic drugs, one of which was attended by the US. During Luxembourg's presidency, the EU also implemented a counternarcotics coordinating mechanism with Latin American and Caribbean countries. The US and Luxembourg also worked together to reach agreement on an exchange of study visits from US law enforcement agencies to the EU's European Drug Unit (EDU) and a return visit from the EDU.

Agreements and Treaties. Luxembourg is party to the 1988 UN Drug Convention and generally complies with the Convention's goals and objectives. It is also a party to the 1961 UN Single Convention and its 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. Luxembourg and the US have been involved in numerous asset-sharing agreements. Over $45 million in seized assets relating to the "GACHA" case were distributed in 1997, with one-third going to the US, one-third to Luxembourg,, and one-third held by the US for Colombia. (The late Mr. Gacha was a Colombian cocaine trafficker with bank accounts all over the world. Colombian law enforcement authorities killed Mr. Gacha, a leading member of the Medellin Cartel, while attempting to arrest him on US charges. The GOL provided cruical assistance to freeze and block the bank accounts, thereby preserving the funds for forfeiture.) Luxembourg gave its share to its anti-drug trafficking fund (Fond de Lutte Contre de Trafic des Sturefiants). A Mutual Legal Assistance Treaty was signed in 1997 and awaits ratification in both the US and Luxembourg. Also, Luxembourg continues to participate in international counternarcotics fora including the Dublin Group and the Financial Action Task Force (FATF).

Cultivation/Production. The USG is unaware of any reported production of illicit drugs in Luxembourg.

Drug Flow/Transit. Luxembourg authorities remain concerned about the small quantities of illicit drugs which transit the country through the FINDEL Airport or overland from neighboring countries.

Corruption. As a matter of policy, the Government of Luxembourg does not encourage or facilitate the illicit production or distribution of drugs, other controlled substances or the laundering of drug money.

Demand Reduction. The GOL continues to target youth in its demand reduction efforts which include anti-drug education programs.

IV. US Policy Initiatives and Programs

Bilateral Cooperation. The USG and GOL cooperate closely in counternarcotics and judicial matters, particularly in money laundering cases.

The Road Ahead. Luxembourg and the US have excellent counternarcotics cooperation on a variety of fronts, and the USG is working to ensure this bilateral effort continues and expands. Anxious to preserve its reputation for having a clean banking sector, the GOL has been forthright and cooperative with US anti-money laundering efforts. An Extradition Treaty signed in 1996, and the Mutual Legal Assistance Treaty signed in 1997, once ratified will provide the US with an additional tool against potential narcotraffickers operating in the Grand Duchy. Our focus will continue to be on working with the GOL to prevent Luxembourg's financial sector from being used by money launderers.

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