Mr. Chairman and members of the committee, thank you for the opportunity to speak to you today on this important subject.

The attacks against the United States on September 11 stunned us all. They also made it very clear that the mission of the Bureau for International Narcotics and Law Enforcement Affairs (INL) -- to provide support to counternarcotics and other anticrime efforts worldwide -- is more important now than ever.

While INL does not have the lead on the war on terrorism, we are strongly supportive of these efforts through our counternarcotics activities, which provide training, equipment and institutional support to many of the same host nation law enforcement agencies that are charged with a counter-terrorist mission.

There often is a nexus between terrorism and organized crime. Many of the skills and types of equipment needed to attack organized crime are applicable to combating terrorism. Much of INL assistance -- such as the equipping of forensic labs; assistance with drafting asset forfeiture and money laundering legislation; and provision of basic training in investigation techniques, maritime enforcement and port security -- applies to both counternarcotics and counterterrorism. Migrant smuggling, document fraud, arms trafficking, auto theft, contraband, and illegal financial transactions are tools for terrorists as well as narcotics traffickers.

In the wake of the horrendous September 11 attacks, we need to rededicate ourselves to work hand-in-hand with our coalition partners to stem narcotics smuggling and to strengthen law enforcement and border controls. Very frequently, the same criminal gangs involved in narcotics smuggling have links to other criminal activities and to terrorist groups. Just as we in the U.S. are trying to strengthen our homeland security, other nations are facing similar challenges. Deepening our law enforcement cooperation with these like-minded nations becomes all the more urgent.

The methods used for moving and laundering money for general crime purposes are similar to those used to move, money to support terrorist activities. INL has worked with the Departments of Justice and Treasury and with-nations around the world to strengthen controls which could thwart the drug traffickers' attempts to launder their funds and to investigate and prosecute those who are involved in moving criminal proceeds. These same law enforcement controls could also help prevent the movement of funds of terrorist organizations.

Similarly, INL drafted the first "Trafficking in Persons" report earlier this year. It is important to note that migrant smugglers bring in not only economic refugees, but also persons linked to terrorist organizations and international crime syndicates. We must therefore strengthen our efforts to halt all alien smuggling.

While we do not possess conclusive evidence directly linking drug traffickers and terrorists in Afghanistan, the Taliban's link to the drug trade is irrefutable. The Taliban have de facto control over 90 percent of the country, including the major areas of the Afghan opium crop. There is a symbiosis between the Taliban and narcotics traffickers, whose smuggling and money laundering networks would be of great help in the Taliban's efforts to circumvent UN sanctions. Additionally, the Taliban is known to provide aid, training, and sanctuary to various Islamic terrorist and separatist groups in Afghanistan, including Osama bin Laden's al-Qaeda group. Al-Qaeda fighters have gained an increasingly prominent role in the Taliban's war against the Northern Alliance, reportedly because war-weary indigenous Afghans are reluctant to fight.

Despite effectively banning poppy cultivation in July 2000, the Taliban has allowed uninterrupted trafficking of Afghan opiates over the past year by not taking any measures to halt the drug trade.

Narcotics interdictions by Afghanistan's neighbors show record seizures of Afghan opiates flowing out and precursor chemicals flowing in. This clearly indicates that Afghan heroin traffickers are drawing from their stockpiles, presumably with the knowledge and perhaps the collusion of some in the Taliban, according to a report by the U.N. Committee of Experts on Resolution 1333 for sanctions against the Taliban. This report states that "funds raised from the production and trade of opium and heroin are used by the Taliban to buy arms and war materials and to finance the training of terrorists and support the operation of extremists in neighboring countries and beyond."

Before last year's ban on opium poppy cultivation, the Taliban collected from 10-20 percent taxes on the yield of poppy fields, as well as taxing the processing, shipment and sale of opiates. United Nations estimates for 1999 say that the value of the Afghan opium crop at the farm gate was $265 million, which represents at least $40 million in tax revenue for the Taliban. However, its revenue may be far greater, according to the U.N.

In the Western Hemisphere, there is a historic link between various terrorist groups and narcotics trafficking. The Shining Path cut a brutal swath through Peru from the 1980's to the mid-1990s, largely funded by taxes on cocaine trafficking. In Ciudad del Este, Paraguay, and along the loosely controlled region that it borders with Brazil and Argentina, members of radical Islamic groups are reported to be engaged in money laundering, intellectual property rights piracy, alien smuggling, and arms trafficking.

One such individual is Said Hassan Ali Mohamed Mukhlis, a suspected member of the Egyptian Islamic Group with possible ties to Osama bin Laden. This group is linked to the murder of 58 tourists in Luxor, Egypt, and Mukhlis himself was arrested in 1999 by the Uruguayans in connection with foiled plots to bomb U.S. embassies in Paraguay and Uruguay.

Three of the 13 Arab individuals, recently arrested in Paraguay for issuance of false Paraguayan identification documents, were identified by the FBI as having close ties to Hamas and the Lebanese Al-Kaffir group. Reportedly, they collected funds for these terrorist groups to support terrorist plots against the United States. In July of this year, a vehicle containing improvised explosive devices was discovered near our embassy in Paraguay. Police said that a getaway vehicle used in this foiled plot was purchased by an individual with suspected ties to the Manuel Rodriguez Patriotic Front, a known Chilean terrorist group.

In August of this year, Bolivian authorities expelled six Pakistani citizens suspected of links to the terrorist attacks on September 11 in New York and Washington. They were arrested by the FBI upon their arrival in Miami. It is well documented that designated foreign terrorist groups in Colombia, such as the Revolutionary Armed Forces of Colombia (FARC), National Liberation Army (ELN) and United Self-Defense Forces of Colombia (AUC), all benefit substantially from their deep involvement in drug trafficking. For example, there are strong indications that the FARC, a group which openly engages in illicit narcotics production and trafficking, has established links with the Irish Republican Army to increase its capability to conduct urban terrorism. In July, the Colombian National Police arrested three members of the IRA who are believed to have used the demilitarized zone to train the FARC in the use of explosives. We are watching this ongoing investigation with great concern.

These are but a few examples of how terrorists use narcotrafficking and international crime to support their activities. INL can assist the Department's efforts to combat terrorism by helping foreign governments to strike at the very means that terrorists use to finance their activities.

The Andean Regional Initiative, overseen by INL, was developed to support the efforts of nations plagued with drug production and/or transshipment to secure their borders and prevent the use of illegal activity to finance terrorism, or any other criminal activity that disrupts the political and economic foundations of democracy.

The Andean region represents a significant challenge and opportunity for U.S. foreign policy in the next few years.

Important U.S. national interests are at stake because drug trafficking is a problem that does not respect national borders and that both feeds and feeds upon the other social and economic difficulties with which the Andean region is struggling.

Democracy is under pressure in all of the countries of the Andes. Economic development is slow and progress towards liberalization is inconsistent. The Andes produce' virtually all of the world's cocaine, and an increasing amount of heroin, thus representing a direct threat to our public health and national security. All of these problems are inter-related. Sluggish economies produce political unrest that threatens democracy and provides ready manpower for narcotics traffickers and illegal armed groups. Weak democratic institutions, corruption and political instability discourage investment, contribute to slow economic growth and provide fertile ground for drug traffickers and other outlaw groups to flourish. The drug trade has a corrupting influence that undermines democratic institutions, fuels illegal armed groups and distorts the economy, discouraging legitimate investment. None of the region's problems can be addressed in isolation.

Since we believe Plan Colombia will result in major disruption of the cocaine industry, a regional approach becomes even more of an imperative. Traffickers will undoubtedly try to relocate as their operations in southern Colombia are disrupted. We believe they will first try to migrate to other areas inside Colombia, then try to return to traditional growing areas in Peru and Bolivia. But if those options are forestalled, they may well seek to move more cultivation, processing and/or trafficking routes into other countries such as Ecuador, Brazil, or Venezuela.

Establishing security along the borders of these countries will be a critical element in the success of this regional plan. In that vein, Ecuador has established a Northern Border Initiative to promote better security and development in the region bordering Colombia; Brazil has launched Operation Cobra, a law enforcement effort concentrated in the Dog's Head region bordering Colombia; Panama has taken concrete steps to improve security and development in the Darien region; and Venezuelan authorities have cooperated admirably on drug interdiction, exemplified by last year's record multi-ton seizure during Operation Orinoco.

When looking at U.S. programs in the Andean region, it is important to keep in mind the situation in Colombia just a few years ago. The large drug lords and organizations had embarked on an extensive campaign of violence to bring the government to its knees, and almost succeeded. Their symbiotic relationship with illegal armed groups continues to keep the government weak. And one can imagine the threat to U.S. national security that would have been posed by a trafficking state used as a springboard for international terrorist groups. That is why the Andean Regional Initiative continues to be critical.

Mr. Chairman, members of the committee, I want to thank you again for giving me the chance to speak with you today and for your continued support for INL's important role in the war against terrorism.