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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