Brazil & Southern Cone - July 2012 (ISSN 1741-4431)

The government of President José Mujica is moving to legalise marijuana. This is the most headline-grabbing of 16 proposals to combat insecurity, the main public concern in Uruguay since Mujica came to power in 2010. Attracting far less attention, but almost as significant, is a big move to combat money-laundering.

The consumption and possession of marijuana, it is important to point out, is not currently a criminal offence under Uruguayan law. Selling marijuana, on the other hand, is a crime. Under a draft proposal drawn up by the Mujica administration and announced on 20 June, but not yet presented to congress, the production and sale of marijuana would be legalised and controlled by the state, according to press reports, which are providing the only detailed source of information so far.

The press reports claim that consumers would be entitled to purchase up to 40 ‘porros’, marijuana cigarettes, a month from a state agency that would be established to control the growth, distribution and sale of marijuana. They would have to register their national identity card in order to obtain marijuana, however, and would be subject to government monitoring of their habit.

The government justified its proposal on the grounds that it would use the taxes raised from its ‘marijuana business’ to fund rehabilitation treatments and drug prevention strategies as well as to establish a centre of product quality control. It also argued that it would help prevent consumers from being drawn to “harder” drugs, such as cocaine base paste, typically purchased from the same dealers on the black market.

The president of the International Narcotics Control Board (INCB), Raymond Yans, contended that the black market would still exist as younger Uruguayans would be unable to acquire marijuana because of their age. Yans expressed his disconcertion that the proposed legalisation had only been reported in the press and that the authorities had not notified the UN about something “so important”. He said that even the Uruguayan embassy in Vienna (the INCB is based in the Austrian capital) had no official information to pass on.

Yans said he would travel to Montevideo shortly to hold “a frank and open” discussion about the Mujica administration’s proposal, which he said totally contravened Article 4 of the 1961 Convention. This stipulates that:

“The parties shall take such legislative and administrative measures as may be necessary:

a) To give effect to and carry out the provisions of this Convention within their own territories;

b) To co-operate with other States in the execution of the provisions of this Convention; and

c) Subject to the provisions of this Convention, to limit exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of, trade in, use and possession of drugs.”

Yans insisted that his intention was “to talk and not to threaten” but he added that there would be “serious repercussions” for Uruguay, including “difficulties with other countries”. Most nations in the region have kept their own counsel so far, but Colombia’s President Juan Manuel Santos was critical of the “unilateral decision” by Uruguay, which he said would create “distortions” in the region. He said that a common focus would be much better.

“Someone had to be the first,” President Mujica told the Brazilian daily O Globo. “Someone had to start in South America because we are losing the battle against drugs and crime in the continent.” The proposal should pass in congress as the ruling Frente Amplio (FA) has a majority in both chambers; there are also a number of representatives from the opposition Partido Nacional (Blancos) and Partido Colorado (Colorados) who support the bill.

In a long editorial in Peru’s national daily La República, Mario Vargas Llosa, the country’s famous and politically influential novelist, praised President Mujica for his “brave decision” to change tactics, arguing that the “purely repressive response (to drugs) is counterproductive”. Vargas Llosa said Uruguay had set “an example for the other Latin American countries to follow”. He said that legalisation would require an information campaign about the associated health risks of smoking marijuana, but that the same had been employed for cigarettes across the world.

Vargas Llosa formed part of the Latin American Commission on Drugs and Democracy (LACDD), forged in 2007 by three regional political grandees – the former presidents Ernesto Zedillo of Mexico (1994-2000), Fernando Henrique Cardoso of Brazil (1995-2002), and César Gaviria of Colombia (1990-1994), which favoured a paradigm shift in strategy on the grounds that the war on drugs had failed and criminalisation of consumption had not yielded the expected results. Indeed quite the contrary. The report, which has grown in influence, contended that the war on drugs had engendered adverse repercussions: a rise in organised crime; a growth in drug-related violence; and “the criminalisation of politics and the politicisation of crime”, such as the corruption of democratic institutions.

The Uruguayan government’s approach leans heavily on this report, which advocates an alternative vision of treating drug users as a matter of public health; reducing consumption through public education campaigns; and focusing repression exclusively on organised crime and not drug users. To achieve these goals it proposes a state policy to end the stigmatisation of addicts and to welcome them into health care systems and rehabilitation programmes. It argued that, combined with education campaigns to which addicts could help contribute, this would reduce the demand for illegal drugs, undermining the illegal drug business. The report blamed prohibitionist policies for the damage associated with marijuana use, which it claimed was no more harmful than tobacco and alcohol. Uruguay’s defence minister, Eleuterio Fernández Huidobro, said the prohibition of certain drugs was “causing more problems than the drug itself”.

Money-laundering

The draft proposal on marijuana is one of several measures the government is taking to try and combat citizen insecurity. Another measure, which attracted far less attention but is also highly significant, is a new anti-money laundering plan drawn up with the support of the International Monetary Fund (IMF). This was announced a day earlier, 19 June, to far less fanfare. The two-year action plan aims to improve and update the fight against money-laundering, implementing several reforms designed to make it easier to investigate and prosecute money-laundering crimes. The pro-secretary of the presidency, Diego Cánepa, said it constituted “a qualitative leap and a sign that Uruguay is a serious country”.

The head of the Financial Integrity Group at the IMF, Matthew Byrne, explained that the strategy that Uruguay is promoting is “the result of six years of joint work”. The IMF provided technical assistance, with experts assisting in evaluating risks, defining strategies and eventually suggesting legal reforms. They found weaknesses in subsectors of the financial system and recommended widening controls to combat money-laundering. The government says there are “strong controls” in the banking sector but that things could be improved in “the property market and anonymous societies” (see sidebar).

• Clinton mark 2

Uruguay’s secretary of the presidency, Alberto Breccia, had a Bill Clinton moment and confessed to having smoked marijuana, experiencing “peace, calmness and happiness”, although he said he had not decided to repeat the experience. Former US president Bill Clinton famously said during his 1992 presidential campaign that he had smoked marijuana but “I didn’t inhale, and never tried it again.”

• Anti-money laundering

The director of the Uruguayan central bank’s financial information and analysis unit (UIAF), Daniel Espinosa, said the bank receives between 200 and 220 reports of “suspicious” deposits every year which are investigated. The new anti-money-laundering plan also strengthens oversight of non-governmental organizations (NGOs).