appears to be placing a higher priority on inter-diction capabilities along the Bolivian border,where there has been a noticeable increase in theamount of cocaine paste that has been seized overthe last year. It is believed that the amountswill continue to grow due to an increase in cocaleaf production.¶3. Brazil is a major transit country for illicitdrugs shipped to Europe and, to a lesser extent, tothe United States. Brazil continues to cooperatewith its South American neighbors in an attempt tocontrol the remote and expansive border areas whereillicit drugs are transported. Brazil is asignatory of various counternarcotics agreementsand treaties, including the 1988 UN Drug Conven-tion, the 1995 bilateral U.S.-Brazil counter-narcotics agreement, and the annual Memorandum ofUnderstanding (MOU) with the U.S.
---------------------II. STATUS OF COUNTRY---------------------
¶4. While not a significant drug-producingcountry, Brazil is a conduit for cocaine base andcocaine HCL moving from source countries to Europe,the Middle East and Brazilian urban centers, aswell as a conduit for smaller amounts of heroinmoving from source countries to the U.S. andEurope. Cocaine and marijuana is used amongyouths in the country's cities, particularly SaoPaulo and Rio de Janeiro. Powerful and heavily-armed organized drug gangs, located principally in