ARGENTINA ECHOES U.S. WARNING ON DRUGS ON RIVERWAY

BUENOS AIRES (Reuters) - Argentine security chiefs acknowledged Monday a
U.S. drug agency's warning that Argentina is increasingly important as a
transit point for South American smugglers.

Interior Minister Carlos Corach and anti-drug chief Eduardo Amadeo said
they would study the report by White House drug czar Gen. Barry McCaffrey,
who warned Argentina about the growing cocaine traffic from Bolivia, Peru
and Colombia.

"Trafficking on this route, as a result of the dredging of rivers, has
increased threefold in the past 10 years,'' Amadeo was quoted as saying by
state news agency Telam.

"Containers coming from the north, basically Bolivia, can't be opened
because they are sealed. They sometimes contain large quantities of
drugs,'' said Amadeo, adding that Washington had asked for stricter
controls on such smuggling routes.

Argentina is linked to the heart of the continent by the river ParanDa,
which empties into the River Plate.

Argentina and its neighbors Uruguay, Paraguay, Brazil and Bolivia are
dredging their rivers, centered on the Paraguay and ParanDa, to create the
"Paraguay-Parana Waterway.'' The aim is to create a 2,100-mile network of
waterways.

Central to the project is broadening and dredging the Paraguay River, which
runs through Brazil, Bolivia and Paraguay and leads out to the Atlantic
through the Parana and River Plate, served by the ports of Buenos Aires and
Montevideo.

The aim is to make savings in transport costs for a region united in the
Mercosur customs union.

But the U.S. report, quoted by Argentine newspaper Clarin, said the
waterway lacked tight controls and "is vulnerable to being used as a
corridor for smuggling cocaine from Bolivia.''

Interior Minister Corach said Argentina was "In contact with U.S. security
and intelligence agencies'' about Argentina's role as a transit point for
drugs, but stressed that Argentina ''is not a consumer country.''

"Of course there are drug traffickers,'' he was quoted as saying by Telam.
"But it is not true that there are more and more all the time.''

However, he drew attention to the recent killing of two Argentine border
policemen on the frontier with Bolivia 10 days ago. The crime has been
attributed to Bolivian drug smugglers and three men are being held in
Bolivia. Corach said he would seek their extradition.

Checked-by: Richard Lake