The South American Cocaine Trade:
An "Industry" in Transition
The heart of the international cocaine trade is located in the Andean region of South
America. Virtually all of the world's cocaine base, the intermediate product used to
manufacture cocaine hydrochloride (cocaine HCl), is produced in Peru, Bolivia, or
Colombia. Cocaine base production in Peru and Bolivia in 1995 represented about 90 percent
of the world's cocaine base; the remaining 10 percent was produced in Colombia. Operation
BREAKTHROUGH estimated worldwide cocaine production in 1995 at 715 metric tons.1
The major Colombian drug trafficking groups continue to produce most of the world's
cocaine HCl. They import hundreds of tons of cocaine base from Peru and Bolivia, convert
it into cocaine HCl at clandestine drug laboratories in Colombia, and export the illicit
product to the United States and Europe. Independent Bolivian and Peruvian trafficking
groups, however, increasingly are producing cocaine HCl.
The governments in the Andean region took unprecedented steps against the drug trade in
1995. Notable counterdrug successes included the arrest or surrender of seven of the eight
top Cali drug mafia leaders and the successful execution of an assertive air interdiction
campaign against the traditional Peru-Colombia air bridge. These counterdrug initiatives
have accelerated the trend toward decentralization of the "Cali-centric" drug
trade and compelled traffickers to change the way they "do business" in South
Impact of Operations against the Cali Drug Mafia
The death of Jose Santacruz-Londono and the arrest or surrender of such major
traffickers as Victor Patino, Jose Castrillon Henao and Juan Carlos Ramirez Abadia (aka
"Chupeta") have disrupted some Cali drug mafia drug trafficking operations. The
Cali drug mafia per se, however, has not been dismantled in that Cali drug lord Helmer
"Pacho" Herrera remains at large and the Rodriguez-Orejuela brothers continue to
manage aspects of their trafficking organizations from prison.
DEA reporting suggests, however, that a new generation of relatively young North Coast,
Northern Valle del Cauca, and Cali traffickers will attempt to exploit any "power
vacuum" created by the arrests of the Cali drug lords. The Henao Montoya brothers,
for example, appear to be seeking to increase their power and influence relative to the
Cali "old guard." One important result of this heightened competition between
rival Colombian trafficking groups has been an increase in drug-related violence.
The major drug trafficking organizations in Mexico also may be expected to exploit the
situation in Colombia in order to expand their business contacts with cocaine suppliers in
Peru and Bolivia.
Impact of Operations against the Air Bridge
Assertive air interdiction campaigns against the traditional air bridge by the
governments of Peru and Colombia have forced traffickers in Peru to transport cocaine base
increasingly via land and riverine routes to airstrips in Peru that are located near the
Brazilian or Colombian borders. This smuggling strategy minimizes the time that drug
pilots are put at risk in Peruvian Air Force (FAP) areas of operation.2
Detected drug flights from Peru to Colombia in 1995 decreased significantly compared to
1994. Intelligence in 1995 indicated that this decline in drug flights resulted in a glut
of cocaine base in Peru. This, in turn, led to a plunge in cocaine base prices in Peru.
Reporting in early 1996, however, indicates that cocaine base prices in Peru are on the
rebound. Although the air bridge interdiction initiative is considered to be a counterdrug
success, this year-long campaign does not appear to have caused any measurable shortage of
cocaine base for processing in Colombia.
Expanded Role of "Spill-Over" Countries in the Drug Trade
Aggressive drug law enforcement efforts in Colombia and Peru have forced traffickers to
relocate some of their trafficking operations to Brazil, Ecuador, and Venezuela. Brazil
has become increasingly important as a major cocaine transit route. Limited reporting also
suggests that cocaine HCl production has increased in Brazil.
Venezuela remains a major transit country for cocaine HCl produced in Colombia.
Venezuela also is an important conduit for essential chemicals and a financial center for
drug money laundering. Likewise, Ecuador is an important transit country for cocaine from
Colombia. The countries of the Southern Cone (Argentina, Chile, Paraguay, and Uruguay) are
ranked as secondary transshipment regions for cocaine destined for the United States and
Decentralization of Cocaine Production and Trafficking
The emergence of independent Bolivian, Peruvian, and Mexican trafficking organizations
highlights the trend toward decentralization of the "Cali-centric" cocaine
trade. Increasing quantities of cocaine HCl are being produced by independent trafficking
groups in Bolivia and Peru.
Cocaine HCl production in Bolivia has increased significantly in recent years. In 1995,
61 percent of the cocaine seized in Bolivia was cocaine HCl, as opposed to cocaine base.
In contrast, cocaine HCl comprised only 9 percent of the cocaine seized in Bolivia during
DEA reporting also indicates that independent Mexican, Peruvian, Brazilian, and
Bolivian trafficking organizations are increasing their activities in Bolivia. To date,
however, these organizations have not demonstrated the capability to produce and transport
multiton quantities of cocaine HCl from South America on a regular basis. The Colombian
drug mafias continue to play an important role in cocaine production and distribution in
Recent intelligence and investigative reporting indicates that some independent
trafficking groups in Peru increasingly are producing cocaine HCl. These independent
Peruvian organizations, however, continue to sell the majority of their cocaine base to
Colombian traffickers, who then process the cocaine base into cocaine HCl at clandestine
drug laboratories in Colombia.
The trend toward decentralization of the cocaine trade, of course, is not limited to
South America. Today, the major Mexican trafficking organizations are second only to the
Colombian drug mafias in terms of power, sophistication, and international scope of
operations. Accordingly, Mexico's drug lords may be expected to exploit opportunities to
Limited reporting suggests that certain Mexican trafficking organizations are
attempting to bypass the Colombian drug mafias and deal directly with Bolivian and
Peruvian cocaine HCl suppliers. While predictions of a fundamental "power shift"
in the drug trade away from the Cali drug mafia and toward the "Mexican
Federation" are premature, additional expansion of Mexican trafficker contracts with
cocaine suppliers in Peru and Bolivia is anticipated. The major Colombian drug trafficking
organizations, however, are expected to remain dominant players in the international
cocaine trade in the next five years.
The decentralization of the traditional "Cali-centric" cocaine trade presents
international drug law enforcement authorities with new challenges. Traditional
enforcement strategies and intelligence collection programs designed to target the major
Colombian "cartels" may not provide optimum results against a fragmented cocaine
"industry" comprised of hundreds of smaller, but significant, Latin American
trafficking organizations. The international drug law enforcement community must explore
new and innovative strategies to confront successfully the evolving cocaine trade into the
1) Operation BREAKTHROUGH is a
DEA scientific research project designed to estimate the amount of cocaine produced in the
Andean region by examining the yield and alkaloid content of coca crops and the efficiency
of clandestine laboratory operations.
2) Drug pilots have
reasonable cause to avoid the traditional Peru-Colombia air bridge. In 1995, the FAP
forced down or shot down 20 drug aircraft. Likewise, the Colombian Air Force strafed or
forced down at least 15 drug aircraft.
This report was prepared by the Latin America Unit of the Strategic
Intelligence Section. For additional information, please contact the Intelligence
Production Unit, Intelligence Division, DEA Headquarters, at (202) 307-8726.