THE US-LED WAR on terror has already had an impact on diplomacy, economics and law enforcement in the region. Now its reach is extending further, affecting both the supply of drugs, and enforcement and interdiction. The defeat of the Taleban in Afghanistan has meant a 20-fold rise in opium production from last year and the drugs are finding their way around the world. The 3,500 to 4,000 tonnes of opium estimated to be growing in Afghanistan is still not the record 4,600 tonnes recorded in 1999, but the revival of the heroin trade has been swift, just one year after the Taleban had brought the opium yield down to 200 tonnes. The accused drug lords include the governor of Kunduz, Amir Latif. As is the case with drug production elsewhere, the top traffickers profit handsomely, while the peasants who grow the crop may actually be better off cultivating something else. The resurgence of heroin production in Afghanistan has already drawn the attention of aid groups like the UN Drug Control Programme, which has started establishing projects to substitute other crops for opium poppy. The pursuit of terrorist organisations extends to efforts to close loopholes in international financial networks that allow such groups to launder money. Already, there are UN resolutions and US regulations requiring banks to report suspicious transactions, and proposed restrictions on informal, non-bank remittance networks. Regulating these informal networks is important in Asian countries, where they sometimes account for the majority of fund transfers. In some jurisdictions, tighter rules implemented late last year have already resulted in a big increase in the number of suspicious transactions being reported. In Hong Kong, where a unit of the police department's narcotics division investigates all suspicious transactions, the number of reports is at a record high, and 10,000 are expected this year - a 50 per cent rise on last year. In the case of Afghanistan's heroin, the arrival of this year's bumper crop already has international drug enforcement agencies trying to co-operate on policing the border states through which the drugs flow, including Pakistan and Tajikistan. On the money laundering front, the global Financial Action Task Force on Money Laundering and its regional equivalent are working on tightening rules and improving co-operation across borders. As trafficking increasingly relies on sophisticated international networks, and as money laundering related to these organisations grows in complexity, such efforts are now more necessary than ever.