Abstract .International organized crime is growing in significance, not just in some countries, but on a worldwide scale with an increasing number of people affected. The trade in narcotics is the principal source of revenue for international criminal organizations. The countries for production, transit, and consumption are all integrated in complex networks, which are characterized by economic gain, violence, and corruption. Nation-states and boundaries are not much of an obstacle in thwarting these criminal networks. Moreover, the criminal organizations are apt at altering their structure to make themselves more flexible and consequently more difficult to penetrate by law enforcement agencies. All this is in some cases leading to the criminalization of national economies, demonstrating that organized crime is a truly global phenomenon.
The production and smuggling of illicit drugs such as heroin, cocaine, and synthetic drugs as well as the trafficking of women is on the increase in many parts of the world. Even more perniciously, nations are being increasingly undermined by corruption and a higher degree of criminal control of the state. Indeed, links with organized crime are, in some countries, to be found at the highest levels of state. In some countries, furthermore, organized crime is making it harder to solve conflicts where criminal interests and the aims of terrorist organizations overlap and merge. In surveying the Baltic Sea region, for instance, it is apparent that criminal networks are well organized, have clear aims, and are continually searching for new ways to expand their activities. They have their own criminal “ideologies” and “philosophies” and try to neutralize states’ control and law enforcement Walter Kegö is Senior Research Fellow at the Institute for Security and Development Policy. This report is based on the Author’s presentation at two workshops on organized crime in Kiev, November 12, 2008 and Warsaw, December 17, 2008.
Across the region organized crime groups involved in drugs smuggling and trafficking in human beings maintain good relations with customs officers and police officers. Thus, the criminal groups engaged in smuggling very often have some kind of protection from law enforcement officials themselves. In thus doing, they use some of the proceeds from criminal activities to bribe these public servants. The expansion of the area covered by the Schengen Treaty, moreover, has resulted in the European Union’s borders coming closer to regions and areas that are both quite unstable and that have borders which are insufficiently monitored and controlled.
In such a situation it is clear that more effective countermeasures are requisite, both in Europe and further afield. One example of a successful measure taken against criminal activities was in April 2008, when close cooperation between law enforcement authorities in Germany, including Germany´s Federal Criminal Police, the Bundeskriminalamt (BKA), the Europol Liaison Bureau
Germany, and Interpol, paved the way for a successful operation against drug traffickers in Germany. Evidence suggests that the criminal group was responsible for the delivery of 31 kg of cocaine, 33 kg of marihuana, 20 kg of hashish, 1 kg of amphetamine, and 11,000 ecstasy pills. The drugs were intended for distribution to various German cities, mainly in the north-east of the country.
Since the operation, mentioned above, commenced in August 2005, 80 criminal procedures against suspects of various nationalities have been initiated. Links were detected with five American and twelve European countries. Meanwhile, three members of the criminal gang have already been given lengthy prison sentences. The above example is a very good indication of the global scale of criminal organizations and of their activities which transcend national borders. It is also an illustrative case of the necessity of international cooperation between lawenforcement agencies to combat such criminal organizations.
The Justice and Home Affairs Council took the decision to include the new Member States in the Schengen area and to abolish the land and sea borders on December 21, 2007, and the air borders on March 30, 2008.
Trafficking and Consumption of Illicit Narcotics The trade in narcotics is the principal source of revenue for international criminal organizations. As such, the consumption of illicit narcotics as well as the scale and value of the trafficking warrants closer analysis. More than 200 million people worldwide between 15-64 years of age are believed to use illegal substances. On a global scale, the United Nations Office for Crime and Drugs (UNODC) estimates that the annual production of cannabis alone exceeds 40,000 tons and that there are about 160 million users. Further, in a 2008 UNODC report, an alarming increase in cocaine addiction in Europe was detailed, particularly in Spain, Italy, and Great Britain; Spain, incidentally, is the largest port of entry for cocaine in Europe. In regard to other substances, the production of amphetamine and methamphetamines is calculated at 500 tons with some 26 million users; and the production of cocaine is predicted to be around 900 tons with approximately 16 million addicts.
The number of opiate addicts, meanwhile, is estimated at some 16.5 million users with the total production of opiates most likely exceeding 9,000 tons annually, with more than 90 per cent of production originating in Afghanistan.
Much of this opium then ends up as heroin on the streets of Europe. The revenue of the global production of opium is estimated by the UNODC to surpass US$4 billion, whence about US$1 billion goes to the opium farmers. The remaining 3 billion goes to the smugglers and the warlords controlling the traffic. On the streets of Europe’s cities, however, the price of refined and
smuggled heroin is multiplied many times.
These figures derive from the UNODC, which has its own set of tools for calculating a more qualified valuation of the global trade in illicit drugs. In numbers, this traffic in total has an estimated value of:
•US$13 billion at production level
•US$94 billion at wholesale level
•US$322 billion at retail/consumer level
The above figures show that the turn-over of the narcotics business is not only considerable, but also that criminal organizations reap the greatest profit at the retail level. Indeed, those retailers who manage to evade law enforcement authorities can make a profit of several thousand per cent. Indeed, the global narcotics trade has a larger turnover than the national economies of many countries, with only the oil and arms industries exhibiting bigger proceeds.
If nothing is done to significantly curb addiction to drugs, drug users will continue to provide international narcotics dealers with the financial incentive to continue their activities.
The Altered Structure of Criminality Criminal organizations like the Mafia have been active in the narcotics trade since the 1950s. A classic example is the smuggling route known as the “French Connection,” which was the main transport artery for heroin from Europe into the U.S. through the 1950s and 1960s. In addition to more well-established mafia organizations, a more soluble structure of flexible networks has emerged during the past few decades. Most of these criminal organizations have abandoned the quite hierarchal model of organization that, for instance, characterizes the Cosa Nostra. Instead, role models for newer criminal organizations have been both the regular business world as well as terrorist organizations. They have thus become more decentralized, are well-equipped, and use I.T. for communication networks both in the country and abroad.
Accordingly, the structures of criminal organizations today are often designed so as to penetrate national borders, legal and political systems, and to exert damage limitation control in the form of minimizing costs when strikes are made against their activities; criminal networks with a cellular structure can generally survive even if one unit is taken out. Therefore, the fact that single cells do not possess information about other cells minimizes the risk of exposure of the entire network. In addition, the network is more durable if it is organized in cells where often only one single individual has knowledge of the entire structure of the organization or its management.
New network structures also enable criminal organizations greater flexibility to alter shape when needed. Consequently, this renders it more difficult for anti-crime authorities to successfully combat such organizations. In a hierarchal organization, on the other hand, it is usually much simpler to follow the trace to the leaders of the organizations.
There are many examples of how international crime syndicates have organized themselves in new and innovative ways. A major Russian-speaking criminal organization in Estonia has, for instance, divided responsibilities so that one cell is in charge of smuggling narcotics, while other cells are involved in trafficking people, running stolen cars, or handling contraband consisting of highly prized goods. Another criminal organization, with its origins in Lithuania, has cells specialized in the smuggling of the chemicals needed, whilethe other cells provide, produce, and ship the narcotics to Sweden and other Nordic countries.
Yet another interesting example is an organization described by the U.S. Drug Enforcement Agency (DEA) – the latter managed to successfully foil a major cocaine cartel, which for many years shipped huge amounts of cocaine into the United States. The cartel consisted of several hundred persons divided into “offices.” One office was in charge of manufacturing and distribution from Colombia through Mexico to the U.S. The office that was responsible for money laundering employed couriers and accountants while others in turnstored the cash. The office assigned to handle corruption was engaged in bribing both police officers as well as government officials in order to obtain information on actions planned against members of the cartel. The assassination office consisted of “hit men” whose job it was to kidnap, torture, murder, and perform other tasks in order to maintain the strength and control of the cartel.
The problem we face today is that national and international actions against transnational crime usually target individuals and very often fail to strike the organization as a whole.
The Criminalization of the Economy In many countries, illicit narcotics trafficking and the altering structures of criminal organizations have led to a criminalization of the economy, which is currently to a large degree based on drug related activities. This not only concerns the economies of producer states, but is also valid for those countries’economies that lie along the trafficking routes for narcotics.
Drug cartels go to great lengths to conceal the movement of drug money. As drug money makes its way back to the source of supply, it passes through a network of money laundering operations which often use front companies to cover for the transfer of large sums of money. Popular front businesses include real estate companies, hotels, currency exchange companies, automotive sales
companies, restaurants, and other small businesses.
According to the private intelligence company Strategic Forecasting, Inc.(Stratfor), the turnover from the export of illicit drugs from Mexico to the United States is estimated at some US$25-30 billion annually – a substantial portion of the Mexican economy.
Mexican cartels then launder this money through front companies.
In fact Mexico’s location between the world’s largest producer, Colombia, and the world’s largest consumer of cocaine, the U.S., makes it a natural transshipment point for narcotics. Mexico’s location became even more important for drug traffickers due to the U.S. government’s increased efforts in the 1990s to shut down air and maritime routes in the Caribbean smuggling corridor.
In essence, Mexican organized crime groups are supply chain entities, competing for suppliers in Central and South America, rapid and low-friction transit routes in Mexico and across the border, and for consumers in the United States. Competition among the major Mexican cartels is about access to and control of the most lucrative trade paths. This competition leads to wars between cartels, which can spill over with ramifications for ordinary civilians. The cartels generally try to avoid confrontations with law enforcement authorities and the military in Mexico, and instead seek to mitigate their security risks through bribery, extortion, threats, and incentives.
In Europe, meanwhile, domestically produced marihuana in the Netherlands, known as “Nederwiet,” yields several billion Euros (€) for criminal organizations in Europe. In terms of value as a Dutch export product, Nederwiet ranks third after the cucumber and the tomato. Germany and the UK are the largest customers. The so-called “coffee-shops” in the Netherlands pay €400 million in government taxes each year on their sales of hashish, which amount to 265 tons. The annual revenue is calculated at some €2 billion with approximately 3,400 people employed in these coffee-shops, some of them who are known to be criminals. In terms of cannabis, moreover, according to the Dutch police, more than 500 tons with a value of €20 billion is smuggled out of the country each year.
The Netherlands therefore stands out as a global hub for both the production of illicit drugs, and as a place of transshipment of significant proportions. In other words, not only are very large quantities of synthetic drugs being produced within the country, but there is also a major and continual flow of narcotics passing in and out of the country.
Organized Crime and the State
In sum, corruption that is orchestrated by organized crime also caves at the functions and finances of the state, which can limit states’ potential to pursue economic policies. The effect that organized crime has on the societal economy, moreover, through the phenomenon of money laundering, is a little known menace. The obvious thing is that it threatens the functions of the financial systems and is harmful to the economy in general.
It can be claimed that it is natural for organized crime to try to strive to corrupt states. This is simply due to the fact that this simplifies criminal activities, reducing risks and thereby cutting the overheads. In such scenarios it is not the poorly-paid police or customs agents that are the biggest problem. Instead there is convincing evidence that highly placed government officials have been directly involved in the trafficking of narcotics in many countries. The corruption engendered by organized crime is a major obstacle to economic prosperity and political reforms. Corruption will inevitably serve to hold back some countries from developing into democratic states with rule of law and a sound, functioning market economy.
The drug trade in Afghanistan, for instance, undermines the Afghan government’s drive to build political stability, rule of law, and economic growth. An estimated 500,000 Afghan families earn their living by cultivating poppy, according to the UNODC. They receive an estimated US$1 billion for their crops, which amounts to about US$2,000 per household. Huge profits meanwhile go to the traffickers, their Taliban allies, and some corrupt officials. The country's well-oiled narcotics machine generates in excess of US$4 billion a year from exports of processed opium and heroin. This equates to more than half of Afghanistan's GDP of US$7.5 billion. It can be observed today, furthermore, that government officials have very close ties with organized crime in far too many countries. This is to be regarded as the biggest threat to the political security and stability of a number of countries that organized crime is responsible for. A further problem is that many criminals have ventured into politics, as seen in countries like Colombia, Mexico, Pakistan, and Afghanistan.
In a worst-case scenario, a country may develop into a so-called narco-state, in which a country’s economic foundations are underpinned by narcotics and political power is transferred to criminals. If this is the case, efforts for taking action against the illegal narcotics trade are severely hampered or even rendered impossible. Hence, narco-states should be viewed as an advancement of an evolution of the structure of international crime, since its operations take place over a territory that is more or less lawless, with the effect that the international control of narcotics is abrogated.
Some International Aspects
The international criminal organizations of today operate vast transnational business empires. With the globalization of trade, it was a natural progression for organized crime groups to move from nationally oriented activities to larger scale transnational operations.
Globalization has therefore contributed to the expansion and pervasiveness of organized crime. Globalization of trade has facilitated the free movement of people and labor across borders, and in thus doing, has enabled criminal groups to forge and maintain good relations with similar groups in other countries.
In several transit countries, including areas that are politically unstable, organized crime has become endemic – it has even become entwined with armed conflicts in weak and failing states where revenue from organized crime serves as an important source of financial aid to armed groups and terrorist networks. The impact on societies of increasing addiction to narcotics, as well as the turn-over generated from trafficking, has been nothing short of alarming.
A good example of criminal organizations’ international connections is the Russian “mafia.” Utilizing the country’s position in the Eurasian heartland, criminal groups in Moscow are able to work with suppliers and clients in East Asia and the opium-rich Golden Crescent through the former Soviet states in the Caucasus and Central Asia. Furthermore, they can smuggle goods to and from the Middle East and send commodities to and from the European and American markets through ports on the Baltic and White seas. Due to the sheer scale of this smuggling, any entity that seeks to control this landmass must by necessity be very well organized and possess a wealth of resources.
Organized crime benefits also from international trade, which has given Criminals opportunities to both set up and collectively take advantage of international economic infrastructure bodies such as Islamic banks, taxpayer havens, and the economic systems of weak states, among others.
The development in international trade, the increase in the number of travelers, and advanced technology will inevitably increase the magnitude of the problems faced when effectively monitoring the flows of people and goods across borders. It will thus, by extension, enlarge the possibilities for international criminals to earn ever greater amounts from their illegal endeavors. After all, customs personnel are only able to check a very small proportion of the tremendous number of vehicles and containers that cross national borders on a daily basis. Crime in the twenty-first century is increasingly acquiring a transnational identity when it comes to mutual aid and composition of criminal networks.The goods that are smuggled are mainly items not found on the legal market;but also include merchandise that has been transformed in such a way that it can’t be traced – like precursors as well as commodities that generate high tax rates when legally imported. Narcotics, alcohol, cigarettes, stolen vehicles, chemicals for drug production, humans, and counterfeit goods accrue enormous revenues for criminal organizations.
The liberalization of the EU market and the opening of borders have also led to looser controls on the flow of people and goods – and thus greater opportunities for illegal trafficking.
The law enforcement authorities trying to combat cross-border criminality experience severe shortcomings. They often lack correct analyses, adequate mandates, sufficient resources, or support from political level to effectively take on and counter this problem in an efficient manner.
Suggestions and Recommendations
The challenges that have to be tackled are found in the process towards a harmonization of legal frameworks, extended regional cooperation among public prosecutors, and above all in enhanced collaboration between authorities combating crime. It is urgent to devise legal procedures that will improve coordinating narcotic cases in order to prevent criminals from benefiting from differences in court procedures and legislation.
The use of joint investigation working groups in police and customs work is a step towards expanding and enhancing cooperation that has proved effective. This necessitates a higher degree of activity between anti-crime agencies than is presently the case. Within the Baltic Sea region there is a need for a common strategy, which would alter the conditions and the prospects for enhancing anti- crime collaboration.
Above all, there is a need for shared common methods for intelligence gathering, conducting analysis, and profiling. In addition, the aforementioned would improve information exchange among the anti-crime units from different nations.
Unfortunately, organized crime is often viewed in a national context by researchers and politicians. Few studies frame this problem as an international political security issue. In many parts of the world, organized crime has been allowed to evolve in such a way that it has had serious economic, political, and military repercussions. Even if the UN and other institutions have approached related problems, there is still a significant lack of political awareness of the severity of the problems in many countries. In the worst affected countries, such as Colombia, Mexico, Afghanistan, and Guinea-Bissau, organized crime constitutes an existential threat to the latter as independent and sovereign states.
Cross-border problems require cross-border solutions. There is a demand for more integrated and transnational methods to approach these problems. The cooperation between customs, police, and prosecutors must be further expanded. It is evident, for instance, that it is necessary to undertake joint efforts in order to improve and reform the coordination of intelligence gathering so as to follow the route of illicit drugs. Synchronized efforts are imperative as well to halt the negative development that we now see. It must also be recognized that it is difficult for a single country to prevent large-scale smuggling and money laundering. Effective efforts presuppose close mutual aid and cooperation by countries that are affected by the same type of unlawful activities.
Investigative measures regarding narcotics related crimes must be seen as an international issue. Parallel investigations pursued jointly by affected countries are of mandatory importance. The way of thinking and modus operandi must be brought up to date. We can no longer focus on a local and national level, but we must instead shift the center of our attention on a global level.
To illustrate the above, the heroin industry in Afghanistan is not an Afghan problem at all. On the contrary, it is an international predicament both in terms of its causes as well as consequences. Russia and Europe are the prime export markets for Afghan heroin, and this demand keeps the Afghan drug industry in business.
It is important to expand our knowledge of criminal activities related to narcotics and its impact on societies and economies. Studies are needed that can identify the trends and behavior of criminal organizations and clarify whether they are involved solely in the trading of illicit drugs or whether they are involved in a broader range of activities.
Efficient combating of the narcotics trade also presupposes well-educated officials, as well as a firm grasp of the subject of narcotics crimes, its incentives and functions. As several reports made by the Swedish National Council for Crime Prevention (BRÅ) show, the understanding within the Swedish judicial system, for instance, on how narcotics traffic is organized, as well as the international smuggle routes that are used, is deficient.
In order to combat cross-border narcotic crimes, a totally new political awareness among decision makers is required. They must realize that greater efforts are needed in order to decrease the demand for narcotics; in other words, it must be better understood that it is the addicts who provide the money to organized crime. Ending their drug abuse would contribute to diminishing the profitability of organized crime.
Strengthen the Capacity to Make a Difference
To combat such a multifaceted problem as international narcotics criminality requires a range of measures, but also a continuous assessment of results. The arrangements and efforts made so far have not been as effective as desired.
Therefore it is time to combat international narcotics criminality in a new and more efficient way. The idea is simple: make it harder to be a criminal. Employ the following maxim: crime should never pay off.
A more developed and extended cooperation must be established. This is of vital importance in the fight against the trade in narcotics. Most countries do not have any domestic production of narcotics. This is the case for instance in Sweden, which gets almost all of its illicit drugs from abroad. Both producing and consuming countries should decisively endeavor to find new ways for
The international joint venture between the anti-crime authorities in the Baltic Sea region, the EU, and – in a widened international perspective – also other parties such as the UNODC, is essential for preventing and battling the narcotics trade successfully. The main objective here is to stop the narcotics before they reach the consumer countries. This could be achieved through actions targeting the places where narcotics are grown and refined, and by cooperation among countries along the smuggling routes.
It is imperative to make preparations for using all forms of international cooperation to their fullest extent; that is, to give the crime controllers the necessary tools to be fully able to cooperate on a daily basis at an international level. There is also great demand for development and coordination of national efforts against trade of narcotics crossing borders. Fast and reliable access to information and intelligence is crucial for prevention and investigation of criminal activities on both national as well as global levels.
At the moment there are serious deficiencies in coordination at the operative levels among crime fighting authorities. Moreover, there is also a need for considerably more professional and effective efforts from the intelligence communities in many countries. Efforts targeting the supplies of drugs are the primary key to a decrease in criminality, and more attention must be focused on the subject of reduction of domestic demand. It is essential that all available resources continue to be used in the fight against the accessibility of narcotics in society as a whole.
Making Life Harder for the Drug Abusers and Criminal Leaders It is vital to reduce the recruitment of drug abusers and the criminality linked to it. When young people commit a felony, society must act swiftly, putting in efforts the purpose of which is to minimize the risks for a relapse into addiction. To obtain results that endure beyond the immediate efforts of the police, cooperation among other actors in the field must be enhanced.
At present it is quite obvious that drug abuse funds both terrorism and criminal activities, and to stop using narcotics is at the same time to participate in the combat against terrorism and drug related criminality. Today, most countries do not make systematic efforts to prevent drug addicts from using narcotics.
In order to have a chance of winning the fight against organized crime in the long run, one aim has also to be to indict high-ranking people within criminal syndicates. These key players are not just difficult to replace, but they also have access to vital information that is essential to further prosecute corrupt officials, that is, those officials who provide shelter and information for criminals.
In order to continue the struggle against corruption, the EU institutions have an important role to play in maintaining political motivation and also to provide knowledge to politicians and law enforcement personnel on how to fight corruption. The UNODC Global Programme against Corruption (GPAC) is not only an instrument but also a resource to help countries in this fight. GPAC assists countries with vulnerable economies by promoting anti-corruption measures in the public sphere, private sector, and in high-level financial and political circles.
Go for the Money
When it comes to the enormous capital-flow that is channeled via a range of different financial systems (without fundamental requisites to fight money laundering), it is necessary to institute effective countermeasures. It is therefore of great importance to increase consciousness about the economic power that criminals wield. It is vital that this insight is found not only among the regular crime busters but, above all, among politicians.
The “shadow economy” has always played a critical role in both armed conflict and violent state formation. But since the 1980s shadow activities have increased fourfold as a proportion of the global economy. According to estimates presented by the World Bank, the IMF, and academic researchers, shadow transactions accounted for between US$6.5 trn and US$9 trn in 2001, which is between 20 and 25 per cent of global GDP. According to the United Nations International Drug Control Programme (UNDCP), furthermore, the annual turn-over from the criminal money-market is estimated at some US$1500 billion. If crime control would be aimed at interfering with the significant criminal capital-flows channeled through the regular financial systems, it would make a big difference in the battle against criminality.
Many seem to be of the opinion that the greater the confiscation of drugs, the more efficient the control of illicit substances. The foremost problem with this view is, however, that it is usually the less significant players like couriers who get caught, that is, those who usually have little knowledge about the structure of the organization and who are for that reason expendable.
The key players typically evade any direct involvement in the actual narcotics trafficking, and instead focus on the money. A better strategy would thus be focus to a much greater extent on the money, since it is the economic resources that constitute the foundation for the entire enterprise. The conclusion therefore is to “go for the money.”
published by the Institute for Security and Development Policy. The
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