Highlights
– Another large precursor chemical bust discovered from Asia
– “Designer” synthetic drugs displacing cocaine demands in US markets
– Government successes display sustained efforts to combat the drug trade, but synthetic and counterfeit drug markets will expand in the near to medium-term
On May 12, 2009 authorities in Mexico seized 2.2 million pseudoephedrine tablets and other illegal drugs during an operation in the western state of Jalisco. Authorities also confiscated 381 kilos of pseudoephedrine, ephedrine, and methamphetamines during the raid.
The seizure represents positive results from increased government targeting against precursor chemicals and illicit synthetic drug production and distribution in Mexico. We believe the trade in designer drugs will escalate at or near levels comparable to cocaine, especially to markets in the United States (US), in the near to medium-term.
Background
International customs officials identify Mexico as a primary transit point for counterfeit pharmaceuticals and “designer” drugs, such as methamphetamines. Mexico’s susceptibility to pharma-related crimes is based on a combination of factors, including:
• the worldwide economic downturn,
• a relative lack of government regulations over the industry,
• drug distributors’ reliance on loose supply-chains and transit channels that facilitate easy access for chemical diversion, and
• minimal penalties for counterfeiting and distributing.
During 2003 Mexico took significant steps towards improving the regulatory component of its chemical control program, to monitor and prevent the diversion of pharmaceuticals, as well as precursor chemicals and by-products. Improvements included the implementation of a National Data System, a program designed by the United Nations, as well as the creation of a regulatory inspections task force. The changes were intended to enable Mexican authorities to respond to and issue international export notifications. Unannounced inspections of chemical firms were also introduced as routine procedure.
Recent Successes
The Mexican government faced near immediate successes through the new policies. Operations in 2009 produced key sequestrations and dismantled several production rings, suggesting a sustained commitment by the government to combat the alternative drug trade.
• The week of May 4, 2009 federal agents seized 1.7 million pseudoephedrine tablets and arrested one person in southeastern Mexico during.
• In February 2009 six people were arrested and 324 kilos of pseudoephedrine were seized at the Mexico City International Airport. The suspects were traveling from Hong Kong.
• In January 2009 authorities seized 2.8 tons of pseudoephedrine tablets in the Pacific port of Manzanillo.
• In late January 2009 agents seized more than 575 kilos of pseudoephedrine aboard a charter flight arriving in Cancun.
Outlook
The increase in seizures is also a result of shifting demands in the US, where “designer” drugs are displacing cocaine. Government legislation alone will be insufficient to combat the illicit transfer of precursor chemicals through chemical diversion and the illegal production of synthetic drugs.
Although recent seizures represent successes by the administration, we expect the trade will continue to expand to levels comparable to that of cocaine. Mexican drug cartels will also become more interested in the benefits of smuggling synthetics.
The pharmaceutical industry will also remain susceptible to product diversion due to ongoing intellectual property rights issues and import and export regulations. Mexico will continue to lack a transparent system for preventing diversion and synthetic narcotic productions in the near to mid-term.
