CANADA'S HASHISH TRADE 'FUNDS TERRORISTS'

RCMP Believe Extremists Get Millions From Drugs

OTTAWA -- Proceeds from lucrative Asian hashish shipments smuggled into
Canada likely ended up in the hands of "terrorist elements in Afghanistan,"
says an RCMP intelligence report.

The Mounties believe violent extremists have routinely skimmed off a
portion of the millions of dollars in drug money flowing annually from
Canada to southwest Asia.

A copy of the November 2001 criminal intelligence report, Narcoterrorism
and Canada, was obtained by Southam News under the Access to Information Act.

The declassified RCMP document represents the latest indication of Canada's
role as a supplier of funds to terrorist groups operating abroad.

The illicit drug trade in Afghanistan has long been considered a primary
source of money for the recently deposed Taliban, which supported terrorist
leader Osama bin Laden and his al-Qaida network.

According to police estimates, most of the more than 100 tonnes of hashish
reaching the Canadian market each year has originated in Afghanistan and
Pakistan.

Canadian traffickers have paid an average of $200 US per kilogram to
brokers in these countries, meaning about $20 million US has found its way
back to producers annually.

"Most of the documented hash importations have been with southwest Asian
suppliers that have been in this business for 10 to 20 years," the RCMP
report says. "It is likely that terrorist elements in Afghanistan tax
producers, thereby receiving a portion of the potential proceeds."

The report's release comes the same week the warship HMCS Toronto, part of
the Canadian contingent in the armed campaign against terrorism, discovered
a shipment of drugs aboard a fishing vessel off the coast of Pakistan.

The narcotics, either opium or hashish, were found in plastic bags marked
with the phrase Freedom of Afghanistan. The defence department said the
seizure was under investigation, with coalition intelligence officials
attempting to determine "possible links with al-Qaida or Taliban activities."

U.S. President George W. Bush warned last December that "the traffic in
drugs finances the work of terror" and implored Americans to shun illicit
substances.

The RCMP report, sensitive portions of which were withheld from release,
notes narcotics have long been used by organized crime, extremist and
terrorist groups as a means of generating revenue to support armed conflict.

East Indian, Afghan, Pakistani, Tamil, Turkish and Middle Eastern extremist
groups are "suspected of fund-raising in Canada by various means," the
report adds.

But the RCMP suggest further investigation is needed to confirm suspicions
of Canadian links between terrorists and drug traffickers.

"The closer scrutiny being afforded presently to the terrorist issue could
(help uncover) more concrete information as to the terrorist elements in
Canada resorting to drug trafficking as a means to finance their activities."

In addition to singling out southwest Asia, the Mounties point to South
American drug shipments entering Canada as a potential source of terrorist
funds.

Up to 25 tonnes of cocaine, worth as much as $50 million US, arrive in
Canada annually.

South American insurgent groups are involved in coca production, or exert
control over regions containing coca fields, laboratories and airstrips,
the RCMP note.

These groups impose taxes ranging from $100 US to $500 US per kilogram to
protect the area.