THE PRINCIPAL TARGETS OF ORGANISED CRIME
THE PRINCIPAL TARGETS OF ORGANISED CRIME
25. In the interests of clarity, in this second sub-chapter your Rapporteur will survey the principal targets that organised crime has attacked. She will rely for this purpose on the article by Moisés Naím "The Five Wars of Globalization" (in Foreign Policy, 01-02/2003); she will supplement this article in the light of other studies and the visit by the Civil Dimension of Security Committee to INTERPOL headquarters in Lyon at the end of April 2003.
26. While calculations of the value of the global drugs trade are hard to take literally, according to the United Nations (see Human Development Report 1999, United Nations Development Programme) and to Dr Mark Galeotti (see "Transnational Organized Crime: law enforcement as a global battlespace", in Emerging Security Threats, Bunker R., ed., 2002), drug trafficking would have an estimated annual turnover of 400 billion dollars – equivalent to the gross domestic product of Spain, i.e. 8% of world trade –, and would account for 50% of organised criminal activity. In Europe, activities relating to narcotics are even more extensive, the police in various Union member States having shown that there were long-term strategic alliances among the networks for sharing existing markets or breaking into new ones (see the alliances between Russians and Colombians, or between Turks, Albanians and Central European mafias). Reference will be briefly made here again to drug trafficking as a major source of financing terrorist organisations and terrorist acts (see the Autodefensas Unidas and Revolutionaly Armed Forces of Colombia).
27. In its 1996 Atlas mondial des drogues, the Observatoire géopolitique des drogues (OGD, France) estimated that the increase in profit between the price paid to the peasant for the raw material and the retail price that the drug would fetch in the streets of rich countries, would be multiplied by 20 to 40 on average in the case of hashish and by 1,500 [comma added] to 2,000 in the case of heroin (quoted in Alain Labrousse, "L’approvisionnement des marchés des drogues dans l’espace Schengen", in Les Cahiers de la sécurité intérieure, 32, 1998). In a survey published in July 2001, The Economist indicated for its part that a kilo of heroin bought from a Pakistani peasant for 90 dollars was re-sold for about 3,000 dollars in Islamabad (wholesale), 80,000 dollars in the United States (wholesale) and retailed on the street for 290,000 dollars (see "A survey of illegal drugs", The Economist, 28 July 2001). In the light of this assessment the interest in trafficking in narcotics will be readily understood.
28. Delegates will recall that in 1998, during an extraordinary session of the United Nations General Assembly, the international community had ratified a plan of action for a world-wide campaign against drugs aimed at "eradicating or significantly reducing" the supply of and demand for narcotics by 2008. On reaching the half-way point, the UN Narcotics Commission made an assessment in Vienna on 16 and 17 April 2003 of progress in the implementation of this plan. Although in their final declaration the member States also repeated their willingness to act together to combat drugs and drug-associated crime, it is apparent that the targets set for the 2008 timeframe cannot be achieved. This has been confirmed by the analysis of recent global illicit drug trends published by the United Nations Office on Drugs and Crime (UNODC, Vienna) in June 2003, the principal findings of which your Rapporteur wishes to quote here.
"Typical" narcotic elements
29. With regard to cannabis (marijuana, hashish), the UNODC observes that production has continued to increase everywhere in the world (and particularly in Africa, where a quarter of the seizures are made – see Global Illicit Drug Trends 2003). The United States is the premier consumer market. Its requirements are met above all by Mexico, Colombia and the Caribbean, although it is itself a producer. In Europe a high proportion of cannabis comes from Morocco (up to 70% according to some sources), and to a lesser extent from Pakistan.
30. Regarding coca, the principal producers of which are Colombia (80%), Peru and Bolivia, although the UNODC reports a 22% reduction in the cultivated areas in Peru and Bolivia between 1999 and 2002, it observes that their production of cocaine itself increased between 2001 and 2002. As to demand, it is said to be stable in North America but to be increasing in South America and Europe.
31. As regards opium and heroin, the
UNODCreports that progress has been made in the "golden triangle", the areas of poppy cultivation having shrunk by 40% in Burma and Laos between 1998 and 2002. In the same period, however, world heroin production has gone from 4,000 to 4,500 tonnes. Afghanistan now supplies three-quarters of it, production there having returned to the levels seen before the Taliban ban of 2001. Consumption is falling in Western Europe, but is booming in Eastern Europe and Central Asia (i.e., in the case of the latter, in the very heart of the areas of production and on the main export routes for narcotics).
32. Some point out that the rise in Afghan opium production was so high between 1999 and 2000 that the dealers themselves suggested a freeze in Afghanistan, for fear that prices would collapse. In spring 2001 a field survey in the east of the country by correspondents of the former Observatoire géopolitique des drogues showed that this freeze was allegedly funded by Pashtoun and Baluchi mafias (see Alain Labrousse, Dictionnaire géopolitique des drogues, De Boek, 2003). Since the events of October 2001, the peasants have started sowing again on a massive scale. In April 2002, Mr Hamid Karzai’s provisional government launched a tenyear crop eradication programme, to which the United Kingdom has committed 115 million dollars over three years.
33. In Latin America the trade in these lucrative elixirs is managed by cartels which have set up real "narcomultinationals". Delegates will recall that the Medellin cartel (Colombia) was the talk of the town in the 1990s, and that the death of its godfather, Pablo Escobar, in December 1993 did not disturb the mafia in the region. Other cartels, including the Cali cartel, were able to prosper by virtue of collusion at the highest level and intermediaries in the United States and Europe (particularly in Madrid). Since then these cartels have decentralised their structures and diversified their activities at the same time. In Asia the trade traditionally changes "owners" at the frontier crossings.
34. According to the global figures to which your Rapporteur has obtained access, the United States is currently spending some 11 to 12 billion dollars annually in substantial operations against trafficking in and consumption of narcotics (see the National Drug Control Strategy published by the White House in February 2003). The "Millennium Operation" (October 2000) by Colombian police and the Drug Enforcement Administration led to the arrest of some thirty drug
-dealers in Mexico, Colombia and Ecuador. Moreover, a tunnel between Mexico and the United States through which tons of drugs passed was discovered in March 2002, and Benjamin Arellano Felix (the godfather of one of the most violent Mexican cartels) was arrested.
35. The aims of "Colombia Plan", on which the United States has spent 1.7 billion dollars since its launch in 2000 (to which should be added 600 million dollars for 2003), are the eradication of coca cultivation in that country, support for peace negotiations between the Revolutionary Armed Forces of Colombia and the National Liberation Army and the economic development of the poorest sections of the population. According to the latest report by the Bureau of International Narcotics and Law Enforcement Affairs, United States Department of State (see Fiscal Year 2004 Budget-Congressional Justification), coca cultivation in Colombia has decreased by about 15% since the mid-1990s. Some 463 million dollars have been requested by the Department of State for the support of the Colombian crop-spraying programme in 2004. Overall, however, Washington’s commitment is seen by neighbouring Andean countries as a risk that coca production might migrate to their own territory and increase there.
36. While the replacement of drugs of natural origin by synthetic drugs is not yet a subject for discussion, production of and trafficking in the latter are increasing exponentially. Even in 1996 the United Nations was sending out an alarm call, claiming that synthetic stimulants such as amphetamines (ATS), ecstasy (MDMA) and lysergic acid diethylamide (LSD) "might become the favourite drugs in the twenty-first century" (see Alain Labrousse, Dictionnaire géopolitique des drogues, De Boek, 2003). To say nothing of synthetic cocaine and heroin, which, according to what INTERPOL told the Committee in April 2003, the traffickers "have in mind in the long term". The inescapable fact is that across the world seizures of synthetic drugs, and of ecstasy in particular, have increased threefold during the past ten years.
37. Europe is the largest producer and exporter of these agents. The experts are in agreement that the Netherlands, and to a lesser extent Belgium, supply 80% of the ecstasy in circulation – while the United Kingdom, Ireland and Spain are the greatest consumers of this drug. According to the Drug Enforcement Administration, over 25.6 million MDMA tablets " linked to the Netherlands" were seized on the international market in 2001 (cited in Progress Report as a contribution to the Mid-Term (2003) Review by UNGASS, Transnational Institute, April 2003, p. 16). Although the manufacture of ecstasy in the United States is reported, the bulk of it is handled by Dutch- and Israeli-based criminal organisations via, inter alia, the Netherlands Antilles and Aruba which, like Surinam in South America, have close economic ties with the Netherlands. Some maintain that stricter application of Dutch criminal law would cause a shift in production to the United Kingdom, Germany and Poland, the latter now being among the principal suppliers of amphetamines in Europe. According to the UNODC, production is also shifting to countries in Asia, more specifically to Burma, where poppy cultivation has declined in favour of amphetamine production (see Global Illicit Drug Trends 2003).
38. Your Rapporteur will not dwell on the effects of these drugs on users, or on the risks to public health. However, she does wish to point out that in Asia their consumption seems to be of "utilitarian" type (in the context of work), while in the West they are used essentially for recreation and are associated with certain types of music (techno in particular, which the young listen to at rave parties and in discotheques and clubs, or at small private parties, access to which is denied to the agencies involved in prevention and treatment). In addition, multiple drug addition, involving a mix of synthetic and non-synthetic substances, taken alternately, is said to have become the principal trend.
39. According to information gathered from INTERPOL by members of the Committee, the traffic is booming even more because ecstasy and amphetamines are easy to produce, the markets are within easy reach and these substances are not regarded by users as drugs in the strict sense. Laboratories can be set up and moved relatively easily close to the sites of consumption, while it is no longer necessary to have a sound knowledge of chemistry to manufacture them: only a refrigerator is required, and all that counts is the order in which the chemicals are added. It should be noted that the makers are varying their products more and more in order to avoid prosecution, and that all they have to do is to change one molecule in the composition of a substance for it to be no longer prohibited, while retaining similar psychotropic properties. And INTERPOL points out that the criminal networks that exploit them differ from the large structured organisations known for their involvement with other types of drug, because the former are associations of a few (three to four) persons which form and dissolve as circumstances dictate.
40. This situation is all the more worrying because some of the chemical precursors used in the manufacture of synthetic drugs are available in pharmacies, hardware stores and supermarkets, filling stations, do-it-yourself stores or retailers of building materials, where they have many lawful uses. Some countries have adopted legislation aimed at controlling the sale and purchase of chemicals. In the United States, the 1997 law on methamphetamine (MCA) has reduced the supply of pseudoephedrine to dealers in commercial quantities – they now obtain supplies from Canada, where controls on such products do not exist (see the joint report on Chemical Diversion and Synthetic Drug Manufacture by the Royal Canadian Mounted Police and the Drug Enforcement Administration, September 2001). The diversion of precursors originating in the Chinese People’s Republic, India and the Czech Republic (three of the largest manufacturers of chemicals in the world) is increasing continuously.
b. Arms dealing
41. The networks are also past masters of arms dealing. According to the United Nations, only 3% (18 million) of the 550 million small arms in circulation in the world are used by government, military or police forces. Nearly 20% of the trade in these weapons is said to be in the hands of the networks (see the Russia mafiya in particular), dealings which are said to generate over a billion dollars annually.
42. This figure takes no account of the illegal market in munitions, which ranges from the supply of latest model battle tanks to the most sophisticated modern radar systems, by way of certain constituents of weapons of mass destruction. Although the International Atomic Energy Agency has confirmed only a dozen cases of theft of such constituents in ten years, today the demand is said to be more urgent, involving an increase in prices that might help to create small specialised rings.
c. Human trafficking
43. In March 2000 Pino Arlacchi, a noted expert on mafias and the Director of the United Nations Office for Drug Control and Crime Prevention, became alarmed by the turn that human trafficking across the world was taking, "criminal organisations end[ing] up by finding [that] traffic more attractive than dealing in narcotics" (see Dossiers>Finance>Paradis bancaires et fiscaux", Observatoire des transnationales, http://www.transnationale.org, March 2002).
44. The International Organization for Migration (IOM) estimates that between 20 and 40 million, i.e. 4 million individuals at any time, out of an annual total of 130 million migrants move illegally. Five hundred thousand persons are said to enter the United States this way each year, and 500,000 others enter Europe. This traffic is said to generate profits of the order of 3 to 10 billion dollars; INTERPOL has even assessed the earnings for the year 2000 at some 30 billion dollars (see the presentation by Gwen McClure at the meeting of the Committee in Ottawa in October 2001). This would make human trafficking the fastest growing criminal activity because, for example, the rings can demand up to 35,000 dollars per trip from China to New York. Thus many of those who use the services of a network would be compelled to suffer a form of slavery in order to pay their debts (see the "ants", originally from Wenzhou in China, who work in the clothing industry sweat-shops in Paris).
45. Human trafficking includes two markets: one is illegal immigration or human smuggling, which consists of helping people, in return for money, to enter or to reside illegally in a country. The other is human trafficking which, according to the United Nations, involves "the recruitment, transportation, transfer, harbouring (…) of persons, by means of the threat or use of force (…), or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation (…)" (see the United Nations Convention against Transnational Organized Crime and Article 3 of the Protocol to Prevent, Suppress and Punish Trafficking in Persons). Some link human trafficking to the mafia sex industry (for women and children), to forced labour and organ donation (for children) and the "three Ds", dirty, difficult and dangerous work (for men).
46. In practice these distinctions seem to be applied only with difficulty, hence the problems in accounting for the phenomenon accurately and attempting to deal with it humanely. As a rough guide, the research department of the American Congress reports that one to two million persons cross frontiers every year under duress, including 500,000 women victims of criminal networks. Fifty thousand women and children are said to be brought into the United States in this way, and over 200,000 children (slaves, beggars and soldiers) into West and Central Africa.
47. Governments respond to this human trafficking by stepping up border checks, passing more restrictive laws on asylum and immigration and entering into bilateral readmission agreements. This is shown by the signature by President Bush at the end of February 2003 of a general policy directive to combat human trafficking, or again the new British law on asylum, immigration and nationality passed in November 2002, which seeks to combat smugglers, to track down false refugees and to speed and improve control of the procedure for seeking asylum. The delegates will recall here that the United Kingdom attracts almost one asylum seeker in Europe in three – the absence of any identity document in part explains this situation – and that the country had record immigration in 2002 (see the hundreds of illegals who forced their way into the Channel tunnel; the reception following the closure of the refugee centre in Sangatte in France of most of the persons registered there; and the doubling of the number of refugees coming from Iraq and Zimbabwe).
d. Pirating of intellectual property
48. According to Moisés Naím (see "The Five Wars of Globalization", in Foreign Policyt, 0102/2003.), pirating of intellectual property cost the American economy 9.4 billion dollars in 2001. Thirty per cent of business software in Germany and the United Kingdom, 40% in France and Japan and 60% in Greece and South Korea is manufactured illegally, and in Russia only 8% of it and 3% of video games are authentic. Up to 50% of medicines in Nigeria and Thailand, for example, are produced fraudulently, to say nothing of copies of clothing, watches, unfinished articles, etc.
49. Although technology has clearly facilitated the process (see the pirating of music and songs downloaded on Internet), marketing and the top brands have also greatly contributed to it by creating desire. The World Intellectual Property Organization, the World Trade Organization, the World Customs Organization, or even INTERPOL, have devoted their energies to it for several years, with a success that some describe as moderate.
e. Money laundering
50. Lastly, the networks are past masters in the art of laundering money. The International Monetary Fund (IMF) assesses the annual turnover of criminal organisations at some 1,500 billion dollars, taking into account both the annual earnings from all trafficking – including forms that your Rapporteur has not dealt with (stolen cars, threatened species, dangerous products, defrauding of State budgetary revenues and EU resources) – and income from capital, which is often integrated into the legal economy. Although the laundering of funds is outside the normal scope of economic statistics, the IMF nevertheless estimates that between 600 and 1,000
billion dollars are laundered every year (2 to 5% of the gross world domestic product), most of it profits generated by the sale of narcotics.
51. Laundering is the transformation of cash into respectable capital. The procedure usually involves obtaining fictitious receipts through "understanding" intermediaries (foreign exchange agents, family firms); casinos, and more generally the gambling industry (racing, lotteries) are often the transit points for these operations. The capital is then paid into a bank "that does not ask too many questions", where it becomes bank money converted into electronic cash by way of a computer. Processing is almost always carried out in an offshore banking establishment serving as logistic support for laundering. Money "cleaned" in this way can go into a respectable bank for purchase of government bonds or financial investment – which is apparently highly valued by debtor countries.
52. Although the European Parliament has estimated that some 100 billion dollars were laundered every year in Europe, the main offshore centres have been in the Caribbean and the Pacific. Delegates will recall that in June 2000 the Financial Action Task Force (FATF – OECD, Paris) published a list of 15 nonco-operating countries (i.e. countries whose anti-laundering system suffers from serious and systematic problems), which included the Bahamas, the Cayman Islands, Dominica, Saint Kitts-Nevis, Saint Vincent and the Grenadines, the Cook Islands, the Marshall Islands, Nauru and Niue – as well as Israel, Lebanon, Liechtenstein, Panama, the Philippines and Russia. This list has since been revised every six months, and included in June 2003 the Cook Islands, Egypt, Guatemala, Indonesia, Myanmar, Nauru, Nigeria, the Philippines and Ukraine – territories and countries whose position was re-examined during the FATF plenary session at the beginning of October 2003. Progress has been made in a number of these jurisdictions although none sufficiently to be removed from the list; the notable exception being Myanmar against who proposed FATF countermeasures were expected to come into force on 3 November 2003.
53. Your Rapporteur will not consider the consequences of money laundering for democracies and NATO member-countries here – this topic might be tackled by the Economic Committee. She will simply state that in 1990 the FATF issued Forty recommendations aimed at making the campaign against laundering money effective. In October 2001, the FATF expanded its mandate to deal with the issue of the financing of terrorism, and took the important step of creating Eight Special Recommendations on Terrorist Financing. These Recommendations contain a set of measures aimed at combating the funding of terrorist acts and terrorist organisations, and are complementary to the Forty Recommendations. The latter were amended in June 2003, and are now more restrictive. They include, inter alia: a broader definition of crimes seeking to extend the offence of laundering (see drug-trafficking, to which human trafficking, forgery, smuggling, etc. have now been added); enhancement of the duty of vigilance; increased surveillance of the movements of funds of "politically exposed" persons; extension of anti-laundering measures to non-financial firms and professions (casinos, estate agents, accountants, lawyers and independent legal professions); introduction of key institutional measures in international co-operation; extension of anti-laundering obligations to combating the funding of terrorism; and the prohibition of shell banking companies.
54. Over and above the ambiguity in monitoring systems and weaknesses in their implementation, there is a more fundamental contradiction today: willingness to watch over movements of capital within the framework of a globalised economy. Aspects of this contradiction are the development of cyberbanking, the appearance of the e-money card, or even the imposition of liberal formulas on countries in the South and East which involve large scale rapid privatisations in States which usually have no capital available, whose industrial units and services are obsolete and where the risks deter businessmen from investing.
55. In this second and last chapter your Rapporteur wishes to focus on European countries and the two most "promising" markets at present, namely drug trafficking and human trafficking. Your Rapporteur regards this approach as all the more important because it is in a politically charged context, on the eve of the enlargement of the European Union and of its Schengen area.