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transparency activities”.11 Indeed, if “the diversion of arms thrives in, and depends on, secrecy”, shining alight on the arms trade is essential to preclude its systemic recurrence. 12“Secrecy can be lethal when it allows arms diversion. . Ultimately, the mosttransparent systems are the most effective systems in tackling diversion The ATT provides a crucial platform for states to build and share experienceof arms diversion and effective action to address it. Helping to internationallyharmonize practice will be essential. Lower levels of transparency in onejurisdiction make it a magnet for diversion, a first step in transitioning weaponsfrom the legal market to providing tools of violence to organized crime,terrorists and armed groups not only in that territory but also across borders”. 13Diversion also has gained momentum within the ATT’s diplomatic discussions, culminating with its inclusionas a thematic focus by Japan for the Fourth Conference of States Parties (CSP 2018). The CSP 2018 finalreport endorsed a three-tier approach to information sharing on diversion: “1) policy-level exchanges ondiversion in the sub-working group on Article 11 of the Working Group on Effective Treaty Implementation(WGETI); 2) inter-sessional exchange of policy-related and relevant operational information via theinformation exchange portal that is under development; and 3) an informal meeting among interested StatesParties (and possibly signatory States) to discuss concrete cases of detected or suspected diversion thatthey are dealing or have dealt with”.14Perhaps most importantly, the uptake by the CSP 2018 of two documents on Article 11 developed byWGETI - Annex C, ‘List of possible reference documents to be considered by States Parties to prevent andaddress diversion’ and Annex D, ‘Possible Measures to Prevent and Address Diversion’ - provided asignificant and substantial steps towards tackling diversion.15 While the former document is quite helpful asa reference, listing documents from UNODA, the EU, International Small Arms Control Standards (ISACS),Organization for Security and Co-operation in Europe (OSCE), Regional Centre on Small Arms (RECSA)and the Wassenaar Arrangement as possible sources to be considered by States, the latter documentconsists of a comprehensive list of concrete measures that states can take to prevent diversion at all thestages of the transfer chain. Annex D benefits from case studies, input and recommendations from LatinAmerican states16 and offers concrete and practical measures to prevent diversion, including end-use(r)11For example, Article 11.3, 11.5 and 11.6: “3. Importing, transit, trans-shipment and exporting States Parties shall cooperate andexchange information, pursuant to their national laws, where appropriate and feasible, in order to mitigate the risk of diversion of thetransfer of conventional arms covered under Article 2 (1).5. In order to better comprehend and prevent the diversion of transferred conventional arms covered under Article 2 (1), StatesParties are encouraged to share relevant information with one another on effective measures to address diversion. Such informationmay include information on illicit activities including corruption, international trafficking routes, illicit brokers, sources of illicit supply,methods of concealment, common points of dispatch, or destinations used by organized groups engaged in diversion.6. States Parties are encouraged to report to other States Parties, through the Secretariat, on measures taken in addressing thediversion of transferred conventional arms covered under Article 2 (1).” :Control Arms Secretariat (2017). “ATT Monitor Report 2017” 11 September 2017, p. 19. 9/EN-ATT Monitor-Report-2017 ONLINE-1.pdf12 Ibid, p. 24.13 Control Arms Secretariat (2018). “ATT Monitor Report 2018” 2018, pg. 101 8/EN ATT Monitor Report 2018 ONLINE.pdf14 ATT Secretariat (2018). “Arms Trade Treaty Fourth Conference of States Parties FINAL REPORT” 24 August 2018, p. /CSP4%20Final%20Report%20August%202018%20(ATT CSP4 2018 SEC 369 02018%20(ATT CSP4 2018 SEC 369 Conf.FinRep.Rev1).pdf15 ATT Secretariat (2018). “ATT Working Groups on Effective Treaty Implementation: Chair’s Draft Report to CSP4” 20 July 2018, p.1-30. e/ATT CSP4 WGETI Draft Report EN/ATT CSP4 WGETI Draft Report EN.pdf16 Control Arms Secretariat (2018). “Summary Analysis of CSP 2018 Working Group Meetings” 29 May- 1 June 2018, p. 9/02/Working-Group-Reports-1.pdf4

certificates (EUCs), delivery verification certificates, monitoring and protecting arms shipments, postdelivery checks and physical security and stockpile management (PSSM).17 The Small Arms Survey’s“Possible Measures to Prevent and Address Diversion: Supporting Effective Implementation of the ArmsTrade Treaty” helpfully maps out the full chain of arms transfers, visually presenting the four different stages(before transfer, during transfer, delivery and post-delivery), the vulnerabilities and risks of diversion ineach, and effective manners to preclude them.182. Diversion of Arms and Ammunition in Latin AmericaATT Academy participants engage in a diversion exercise during the first in-person training held in Mexico City in April 2018. Photocredit: Control Arms/Zoya CraigThe LAC region “is an opportune setting in which to consider the potential of the ATT to restrain diversionand look at what countries are trying to do to address it. Given the gravity of the problem [in this region],arms trafficking and diversion are comparatively under-examined and under-reported”.19Control Arms ATT Academy in Latin America, held in Mexico City in April and September 2018, sought toprovide a forum for government officials and civil society representatives to explore challenges and identifypractical solutions to diversion through the effective implementation of the ATT. 20 Participants from sixcountries – Mexico, Honduras, Uruguay, Paraguay, Peru and Chile – held direct responsibilities in theircountry’s implementation of the ATT, such as customs officials, arms procurement military authorities,17ATT Secretariat (2018). “ATT Working Groups on Effective Treaty Implementation: Chair’s Draft Report to CSP4” 20 July 2018,p. 1-30. e/ATT CSP4 WGETI Draft Report EN/ATT CSP4 WGETI Draft Report EN.pdf18Small Arms Survey. “Possible Measures to Prevent and Address Diversion: Supporting Effective Implementation of the ArmsTrade docs/Regulations and Controls/Levels of 9 Control Arms Secretariat (2018). “ATT Monitor Report 2018” 2018, pg. 101 8/EN ATT Monitor Report 2018 ONLINE.pdf20 Ibid.5

export/import control bureaucrats, and national arms registry chiefs. Many of them witnessed cases ofdiversion in their professional or personal lives, bringing concrete examples and useful perspectives to theATT Academy’s discussions.21Diversion risks and occurrences share universal characteristics around the world. Discussions at the ATTAcademy revealed that lack of information sharing, corruption, the prevalence of organized crime, and theexistence of a large and under-regulated private security sector 22 are among the key factors that drivediversion in Latin America. However, some aspects of this phenomenon are of greater prevalence andimpact in Latin America and will be further explored in this report.2.1 Diversion trends in Latin AmericaOver years of evidentiary efforts and tracing requests from governments through the iTrace platform,Conflict Armament Research (CAR) has developed a helpful, though geographically limited, typology ofdiversion. According to this analysis, the most common cases of diversion are battlefield capture, leakagedue to ineffective physical security and stockpile management (PSSM), loss from national custody byundetermined means, state-sponsored diversion, loss following state collapse, and unclear causes. 23 Whiledata is currently not available - no organization conducts evidentiary documentation of diversion andsystematic tracing in the region - a comparison to CAR’s typology of diversion would result in a very differentmanifestation of diversion in LAC. The combined 57 percent of cases of diversion due to battlefield capture,state collapse, and state-sponsored diversion in the context of African and Middle Eastern conflicts coveredby CAR, would be close to zero, or in the single digits, in Latin America – particularly in the absence of‘armed conflict’ in the classical sense.Credit: Conflict Armament Research, Diversion Digest Issue 01, 201821ControlArms Secretariat (2018). "2018 ATT Academy in Latin America" https://controlarms.org/attacademy/enla/.Control Arms Secretariat (2018). “ATT Monitor Report 2018” 2018, pg. 101 8/EN ATT Monitor Report 2018 ONLINE.pdf23 Conflict Armament Research (2018). “Diversion Digest: Typology of Diversion” 1 August 2018, p. /2018/08/diversion-digest-01.pdf226

Conversely, discussions with ATT Academy participants point to the assumption that in the case of LatinAmerica, “ineffective PSSM” or other undetermined loss from national stockpiles would constitute themajority of diversion cases. This is also reinforced by the widely held notion that “diversion from officialstockpiles is known to be considerable and is likely to be one of the key sources of weaponry sustainingcriminal organizations, drug trafficking gangs, private security firms, militia and other armed groups in theregion”.24 While ineffective stockpile management may be deemed a serious crisis in the developingworld,25 the situation is particularly dire in some Latin American countries.The ATT, if effectively implemented, can provide a framework that can be used by Latin Americangovernments to tackle diversion. The Treaty requires States Parties to “take measures to prevent” diversionof arms to unauthorized users or uses (Article 11), providing a framework on which States can build strongnorms, systems and institutions that will enable them to tackle diversion. Articles 11.2 and 11.3 call onStates Parties “to prevent the diversion of the transfer of conventional arms” and “to mitigate the risk ofdiversion of the transfer of conventional arms”.26 While the two provisions appear to address diversion onlyduring transit and transshipment, they can also be applied to address the risk of diversion post-delivery byrequiring states not to authorize the export or "to cooperate and exchange information" if a risk assessmentindicates that diversion might occur after the goods reach their intended destination. A wider considerationof diversion is provided in Articles 11.4 and 11.5, which outline measures that should be taken when the“diversion of transferred conventional arms” is discovered, including “alerting potentially affected StatesParties and examining shipments”.27 Furthermore, in 2018 the WGETI has agreed that States Partiesshould consider the issue of preventing diversion “that takes place during transfer (i.e. in-transfer diversion)as well as diversion of items after they have been delivered (i.e. post-delivery diversion)”.28“One important measure of a government’s readiness to receive weaponsis its ability to keep them safe from diversion and accidents. Stockpilesecurity and management are basic but essential aspects of control overthe instruments of violence; diversion to unauthorized groups orindividuals (whether through corruption, malice, incompetence oromission) can be an indicator of how well a given state performs”.29The ATT references stockpile management in Article 16, in the context of international assistance toimplement the Treaty, indicating that the Treaty’s effective implementation begins with establishing acomprehensive national system. Among the measures that the WGETI recommends States Parties take to24Control Arms Secretariat (2018). “ATT Monitor Report 2018” 2018’, p. 101.The Small Arms Survey has recalled that “numerous reports from South-East Asia suggest that many weapons and ammunitionstorage facilities are left unguarded and in an almost comical state of repair – one, for instance, was described as having a lockeddoor, a roof, but only three walls”:Bevan, James (2008). "Arsenals Adrift: Arms and Ammunition Diversion" 2008, p. -02-EN.pdf.For the Horn of Africa, a PAX report included among its recommendations to “prioritise and invest in an overhaul of structures andresources to prevent the diversion and trafficking of small arms, light weapons and their ammunition; make major efforts on stockpilemanagement, stricter firearms and ammunition controls, and tackling corruption in security forces”:Mack, Daniel and Frank Slijper (2016). “Armed and Insecure: An Overview of Arms Transfers and Armed Violence in the Horn ofAfrica (2010-2015)” September 2016, p. 165. horn-of-africa-armed-andinsecure.pdf26 United Nations (2014). “The Arms Trade Treaty” 2 April 2013, 24 December 2014, p. es/file/ATT English/ATT English.pdf27 Ibid.28 ATT Secretariat (2018). “ATT Working Groups on Effective Treaty Implementation: Chair’s Draft Report to CSP4” 20 July 2018, p.1-30. e/ATT CSP4 WGETI Draft Report EN/ATT CSP4 WGETI Draft Report EN.pdf29 Mack, Daniel and Frank Slijper (2016). “Armed and Insecure: An Overview of Arms Transfers and Armed Violence in the Horn ofAfrica (2010-2015)” September 2016, p. 165. horn-of-africa-armed-andinsecure.pdf257

prevent diversion of arms and ammunition from official stockpiles include applying physical securitymeasures (such as fencing and locking systems), conducting inventory management and accountingprocedures, controlling access to stockpiles, destroying surplus arms and ammunition, and ensuring stafftraining in safe and secure stockpile management procedures. 30 In implementing other international andregional instruments and frameworks, including the UN Program of Action on Small Arms and LightWeapons (UNPOA), the Protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Partsand Components and Ammunition (Firearms Protocol), Inter-American Convention Against the IllicitManufacturing of And Trafficking in Firearms, Ammunition, Explosives and Other related Materials (CIFTA),states in the region have already taken additional measures to limit diversion. These include marking offirearms, both government and civilian owned, registration and tracing measures to track internal movementof weapons, destruction of surplus weapons and ammunition, and improvements to the security andmanagement of stockpiles. Other best practices and standards on PSSM include normative and technicalguidelines from the Organization for Security and Co-operation in Europe (OSCE), the Organization ofAmerican States (OAS), The United Nations Regional Centre for Peace, Disarmament and Developmentin Latin America and the Caribbean (UNLIREC), the International Small Arms Control Standards (ISACS),the International Ammunition Technical Guidelines (ITAGs), and others. As such, the implementation of theATT should be harmonized and coordinated with these relevant instruments, in order to strengthen theireffectiveness and limit duplication.Credit: Small Arms Survey. “Possible Measures to Prevent and Address Diversion: Supporting Effective Implementation of the ArmsTrade Treaty”, 2018However, as a significant amount of SALW and ammunition involved in criminal activities in the LAC regioncame from state sources, much more needs to be done to limit the diversion of guns and ammunition tounauthorized users and uses. Furthermore, anti-diversion measures should not only be directed at haltingthe illicit flow of weapons to organized crime – they must also ensure that government security forces do308Ibid.

not use the weapons they receive in ways that create insecurity, violate human rights, perpetuate corruptionor contribute to gender-based violence.Emphasis must also be given to diversion during transfers (including ‘straw-man purchasing’ and the socalled ‘ant-trade’), and ‘leakage’ from private actors, given the “limited oversight of the firearms holdings ofprivate security companies in LAC”.31“Diverted weapons that were originally purchased lawfully in the U.S. area major challenge for many countries across LAC. Between 2006 and2009, 34 percent of illegal guns seized in crimes in Guatemala weretraced from the U.S. Furthermore from 2014 to 2016, some 50,133 gunsoriginating in the U.S. were recovered as part of criminal investigations in15 countries stretching from North America to Central America and theCaribbean”.32The most commonly reported examples of diversion during transfers involve weapons that are purchasedby individuals in the U.S. and are then trafficked, in small numbers, to cartels and other criminalorganizations in LAC countries. According to the 2018 ATT Monitor Annual Report, “between 2009 and2014, 70 percent of all illegal weapons seized in Mexico by national authorities were determined to haveoriginated in the U.S. – a total of 73,684 firearms”.33 On this topic, one ATT Academy participant noted thatfrom 2014 to 2016 “U.S.-sourced guns were used to commit crimes in nearby countries approximately onceevery 31 minutes” as “many of the same gaps and weaknesses in U.S. gun laws that contribute to illegalgun trafficking domestically likewise contribute to the illegal trafficking of guns from the United States tonearby nations”.34Discussions at the ATT Academy also revealed that tracing requests for illicit arms and ammunition seizedby national security forces often indicate a European origin. These claims are confirmed by a 2016 reportpublished by the Department of Justice's Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) whichindicates that about 70 percent of firearms seized in Mexico and traced via the ATF Tracing ElectronicSystem (eTrace), from 2009 to 2014 originated in the United States” and of these about 17 percent weretraced to a country other than the US and 13 percent were of indeterminate origin. According to ATF data,of the 17 percent of firearms traced to destinations, “the top five countries of origin of firearms seized inMexico were traced back to Spain (3,786), China (3,027), Italy (2,186), Germany (1,522), and Romania(1,287)”.35To enable Latin American states to effectively tackle diversion, ATT States Parties from other regions,particularly major exporters, should consider the proposed end-use(r) in the U.S. and carefully weigh thepossibility of diversion when conducting their risk assessments. One ATT Academy participant noted thatprecluding some of these transfers through more robust risk assessments would be “a concrete applicationof the ATT”. Exporters of small arms, ammunition and parts and components have a responsibly in31Control Arms Secretariat (2018). “ATT Monitor Report 2018” 2018 8/EN ATT Monitor Report 2018 ONLINE.pdf32 Ibid, p.10633 Ibid, p.106.34 Parsons, Chelsea, and Eugenio Weigend Vargas (2018). "Beyond Our Borders." 2 February / See also:Muggah, Robert, and Topher Mcdougal (2019). "Why a 'Great Wall' Won't Stop the Cross-Border Gun Trade.” -great-wall-wont-stop-cross-border-gun-trade.35 United States Government Accountability Office (2016). “Firearms Trafficking: US Efforts to Combat Firearms Trafficking to haveMexico improved, but some Collaborations Challenges Remain” January 2016, p.1-40. https://www.gao.gov/assets/680/674570.pdf9

preventing their diversion within the U.S. civilian market and consequent illegal trafficking into Mexico andCentral America.Under Article 11, all ATT States Parties commit to take “mitigation measures such as confidence-buildingmeasures or jointly developed and agreed programmes by the exporting and importing States” 36 to preventthe diversion of arms to unauthorized uses or users. Yet, while efforts to prevent diversion are fairlywidespread, their prevalence in Latin America may be lower than elsewhere. In fact, two-thirds of all statesresponding to the ATT Baseline Assessment Project “indicated that they are involved in cooperativemeasures to prevent diversion” – while this was the case for only six of the sixteen respondents from theAmericas.372.2 Common types of weapons diverted in Latin AmericaHeavy weapons like tanks and combat aircraft are difficult to divert. In the absence of conflicts or armedinsurgency, firearms are mainly of interest for criminal organizations. Conversely, diversion of SALW ismuch more pervasive, particularly given their concealability and portability, and “their wide distributionthroughout security force stockpiles”.38 According to Small Arms Survey, “while larger conventional arms,such as artillery and missile systems, are rarely deployed to smaller units of a country’s security forces,small arms and light weapons fea

4 transparency activities".11 Indeed, if "the diversion of arms thrives in, and depends on, secrecy", shining a light on the arms trade is essential to preclude its systemic recurrence.12 "Secrecy can be lethal when it allows arms diversion. . Ultimately, the most