Origins of Trans-Border Crime and Corruption in See

II. THE BACKGROUND: ORIGINS OF TRANS-BORDER CRIME AND CORRUPTION IN SEE

The problems, related to corruption, which have activities and in their turn contributed to the been troubling the Southeast European countries development of a stable smuggling system. This during their transition to democracy and market system was built both vertically (from political economy, are not unique and specific only to this leaders to actual smugglers) and horizontally (it region. The long list of problems, described and included the whole chain of smuggling channels, analyzed in detail in the second section of this passing across the new state borders and con- work, could be compiled for virtually any transi- necting through common interests the political tional country, regardless of its geographic loca- elites in all post-Yugoslav republics). tion. The situation regarding corruption in state administration, judiciary or in the economy in The elites in the Yugoslav republics were actively Southeast Europe is in principle not that different involved in development and organization of from the situation in Central Europe or in Latin smuggling channels, and they protected and America. The main difference is in the scale of this assisted those who were directly involved in their phenomenon and in the circumstances which fos- realization. This prosperous “business” was con- tered its exceptional permeability in the Balkan trolled in close cooperation between politicians, societies. This, however, might be to an enor- their security forces lobbies and organized crime mous extent a consequence of a very specific set structures. The Yugoslav experience shows that of circumstances the Southeast European coun- temporary symbiosis between authorities and tries (unlike the ones in Central Europe) faced, organized crime during the process of creation of especially during the first half of the 1990s. new states leads to permanent transformation of state/national interests into private ones and fos- The war in the former Yugoslavia and the ters the development of corrupt, non-transparent sanctions and embargo regimes, imposed on the and crime-permeated societies. warring republics (especially the sanctions imposed on the Federal Republic of Yugoslavia, The free reign given to the organized crime in the which, due to the fact that FRY borders on all war-ridden Western Balkans, had an impact also Southeast European transitional countries, direct- on other countries on the peninsula. The connec- ly effected the whole region) led to proliferation between the events in the former Yugoslavia tion of organized crime, and especially of and the trans-border crime and related corruption smuggling, trafficking and illegal trade in the in the Balkans was most clearly visible during the peninsula. This in turn gave an enormous boost to trade and arms embargos, imposed by the UN on spreading of corruption. The already high poten- post-Yugoslav states. The sanctions and embar- tial for corrupt practices, based on the drawbacks gos fostered the development of the regional net of communist system, non-existent or low-devel- of smuggling channels, with the organized crime oped democratic norms and values, inefficient structures in countries like Bulgaria, Romania and and underdeveloped economy and non-transpar- Albania playing a crucial role in this process. ent decision-making processes, was thus trans- Furthermore, smuggling of goods under embar- formed into one of the most important and per- go to post-Yugoslav countries became an impor- sistent problems the region faces today. tant source of income for people of all social groups, ranging from political leaders to people, Due to the character of the processes of appear- living in the border areas. As a result, corruption ance of post-Yugoslav states and establishment permeated law-enforcement agencies and politi- of their national-state sovereignty, the armed cal elites in these countries. conflict between the central government in Belgrade and the authorities in the seceding Understandably, the Yugoslav conflicts and the republics seemed highly likely. In the name of the interweaving of political-ethnic and criminal higher goals like protection of national independ- interests in the Western Balkans are not the only ence and sovereignty, the leaderships of seceding reasons for the creation and growth of the region- republics had to set up and arm the newly creat- al criminal infrastructure, based on permanent ed republican armies in the only way possible – smuggling channels and systemic corruption. illegally, by using existing as well as newly estab- There are at least two more important factors, lished smuggling channels. The party leaders and which contributed to the criminalization of trans- high-ranking figures in the Yugoslav army and the border traffic and the ensuing corruption. Yugoslav secret service largely tolerated these

11 The first is the liberalization of movement of employed in the sex industry. The Southeast goods and people and the lifting of visa and Europe is also one of the most important links in other restrictions in the regional post-Communist the chain of European cigarette smuggling. All countries. In combination with the weakening of these aspects represent a practically bottomless the state control, this has created favorable con- source of corruption, mostly among the border ditions for trans-border crime. In particular, the police and customs officials, but also in the judi- withdrawal of the state from strict control over ciary and the public administration. Furthermore, the movement of people and goods across the the scale of these criminal activities also bred borders encouraged the processes of privatiza- political corruption because of the need for polit- tion of both old and the newly-created smuggling ical protection of the criminal networks. channels. These channels were thus taken over by the criminal and semi-criminal groups in close The illegal transactions, however, are not limited cooperation with former agents of security serv- only to trans-border business (import and ices. State administrators, employed in key insti- export). Their destructive impact can be seen also tutions like customs, police and other services, in the deformed structure of national economies, involved in border control, also got included in since the extraction of enormous revenues from the scheme through the expanding corruption the illicit import and export can be possible only networks. It can be said that to a great extent bor- if the large enough gray sector exists. After the der control passed from the hands of the state collapse of the Soviet model of total state control and became an unlawfully acquired private over the economy, illegal transactions performed domain of illegitimate actors. In addition, in the gray sector came to comprise between most of the borders have not been defined and 30 and 50 percent of the Balkan national mutually recognized, and consequently properly economies. A common practice is that those controlled, until well into the 1990s. Furthermore, who are actively involved in the trans-border the succession of armed conflicts and ethnic crime are also directly or indirectly involved in the cleansing campaigns in the former Yugoslavia led conduct of trade operations in the frame of the to creation of quasi-states (Kosovo is the most unofficial economy. obvious example of such an entity) and weak states, practically unable to control their borders. Becoming aware of the true dimensions of the regional trans-border crime and of its impact on The second factor contributing to dynamic devel- the regional corruption patterns requires that a opment of trans-border crime and corruption dur- comprehensive approach be adopted. For now, ing the last 12 years was the impact of one of the the regional approach in counteracting trans-bor- main features of Balkan economies: namely, that der crime and corruption is still overshadowed by the national borders in this period repre- individual national efforts, which are further frag- sented the largest redistributing mecha- mented by the artificial division on challenges to nism of national wealth. Due to a small capac- internal security on one side, and external securi- ity of regional economies, the value of goods ty of a particular country on the other. The pro- transported to and from the Balkan countries posed analysis offers an argument in support of reached up to 85% of GDP in some cases. If we complex programs and efforts for reflecting the calculate the losses the countries have suffered new complex challenges, which are facing not because of the illegal import and export over the only the societies in Southeast Europe, but also last 12 years, they will most likely exceed the the countries of the European Union. value of revenues from privatization, including the countries where privatization is almost com- 2. 1. The Original Set-Up of Trans-Border pleted (Bulgaria and Croatia). Organized Crime Schemes

Of course, the impact of the region’s geograph- Three different patterns, along which the trans- ic position should be also considered. border organized crime networks in SEE were Balkans have traditionally been the most impor- developed, can be distinguished: tant European point of entry for the Asian heroin. During the last decade, they also became an In Croatia and Bosnia-Herzegovina, smuggling important distribution center for the South (predominantly of weapons) was organized by American cocaine. The region is also the most the republican governments in order to secure important land route for hundreds of thousands the independence and sovereignty of two of illegal immigrants from Near East and Asia, republics. Similar pattern, in organization of who are trying to reach the EU countries. It is also Kosovo Albanian political leaders, can be an important source, transit and even destination observed later also in Kosovo. region for women and girls, trafﬁcked to be

12 In the Federal Republic of Yugoslavia (Serbia cantly contributed to the spread of corruption and Montenegro), governments were also within the Croatian ruling elites. directly involved in organization of smuggling schemes for illegal import of oil, weapons, and The smuggling channels in Bosnia-Herzegovina numerous other goods. were developed in a similar fashion. The crucial role in the smuggling of arms to Bosnia- In Albania, Bulgaria, Macedonia and Romania, Herzegovina was played by the Third World the smuggling and trans-border crime were Relief Agency (TWRA). TWRA was founded in not a part of the hidden agenda of the govern- 1987 in Vienna as a humanitarian agency for ments of the states, but were rather organized Muslims. In 1992 it opened an office in Sarajevo and conducted by individuals and groups and started to cooperate with the Bosnian gov- within or closely connected to the ruling elites. ernment. It became the main financier of the smuggling of weapons for the Bosnian Muslim * * * army. Between 1992 and 1995, around $350 million were deposited on its account, donated by The development of the smuggling channels in Saudi Arabia, Iran, Sudan, Turkey, Brunei, Croatia, Bosnia-Herzegovina and Kosovo was Malaysia and Pakistan. Most of the weapons sup- influenced by very specific circumstances which plied through TWRA were Soviet-made and could not be observed in the other former bought in various Eastern European countries. Yugoslav republics and even less so in other tran- TWRA started to abandon its activities in Bosnia sitional countries. The war in which the Croatian, in 1994. The Austrian anti-terrorist police unit raid- Bosnian Muslim and Kosovo Albanian armies ed the TWRA headquarters in September 1995 were fighting against a militarily superior and and confiscated enormous amount of docu- better armed adversary contributed to the cre- ments, related to arms smuggling and other ille- ation of socio-political environment in which gal activities of the agency. After the TWRA’s smuggling (especially of weapons) was not per- retreat, Iran took over as the most important sup- ceived as harmful for the interests of Croatia, plier of weapons to Bosnia-Herzegovina. The Bosnia-Herzegovina, and Kosovo. On the con- investigation showed that the value of weapons trary, it came to be regarded as essential for smuggled into Bosnia in 1994 and 1995 reached their survival. between $500 and 800 million. Illegal business of such a grand scale as a rule represents a Setting up channels for illegal import of weapons breeding ground for corruption, and like in into Croatia in order to arm and equip the newly Croatia, those involved in the Bosnian arms trade created Croatian army was a necessary step if (for example, Hasan Cengic, a close associate of Croatian authorities wanted to go through with the President Izetbegovic) became some of the their plans for secession of Croatia and thus came richest people in Bosnia-Herzegovina. to be regarded in Croatia as a state-building and not as a criminal act. This illegal operation, In Kosovo, the arms trade was inseparably linked despite being a clear violation of a number of the with the drug trade. Kosovo Albanians have been UN Security Council resolutions, which imposed associated with the European drug trade for arms embargo on all former Yugoslav republics, decades. Their presence has been felt especially is today still generally perceived in Croatia as a on the heroin markets in Germany, Austria and legitimate step, necessary for securing republic’s Switzerland. Apart from remittances from abroad, independence. the drug money was the most important pillar the Kosovo Albanian-organized social and health care It is impossible to estimate the full quantity and and education were based on after 1991. By 1994 value of weapons smuggled into Croatia while and especially after the Dayton Agreement the republic was subject to international arms (November 1995), which completely ignored the embargo. No data is available for 1991 and 1992, Kosovo issue, Kosovo Albanians started to turn when majority of the weapons were smuggled towards the armed resistance. Again, remittances into Croatia. In the period 1993 – 1995 alone, from Kosovo Albanians working abroad (they Croatia imported for $308 million worth of supplied roughly one third of the funding, setting weapons. The arms trade business offered aside 3 percent of their monthly income for the numerous opportunities for personal enrichment purpose) and the drug money were the primary to those involved, especially to the circle of sources for funding the arming of the newly-cre- Croats from Herzegovina, centered around the ated Kosovo Liberation Army (KLA). Defense Minister Gojko Susak, and thus signifi-

13 * * * The Serbian smuggling channels were developed and ran in cooperation between the state admin- Unlike the other republics of the former istration, state security service and the criminal Yugoslavia, Serbia and Montenegro, which con- underworld. The links between the three are most stituted the Federal Republic of Yugoslavia after clearly shown by two people, who played the cru- 1991, had no need to import arms, since they cial role in establishment of the Serbian smug- “inherited” the lion’s share of the YPA’s arsenal. gling networks - Zeljko Raznjatovic Arkan (a noto- Because of their role in the war in Croatia and in rious war criminal, unofficial ruler of the Serbian Bosnia-Herzegovina, the UN Security Council underworld, and an agent of the Serbian security imposed international sanctions on the two service) and Mihajl Kertes (first the deputy-chief republics in the summer of 1992. The Serbian of the security service and then the head of province of Vojvodina has always been known as Serbian Customs). “the bread basket” of Yugoslavia and even under the sanctions, Serbia and Montenegro had little Apart from oil, cigarettes were the most sought- problems in producing enough food to cover the after commodity and cigarette smuggling, for domestic needs. Serbia was also (apart from which Montenegro became notorious, brought Slovenia) the only former Yugoslav republic enormous profits to people involved in it. which was an energy exporter and as such had Cigarette smuggling schemes were developed by enough reserves to “survive” few years of sanc- people from the top echelons of the Serbian tions. What Serbia and Montenegro lacked, above secret service. Part of the profits was used for all, was oil. The Serbian war machine in Bosnia financing war effort in Bosnia-Herzegovina, but especially depended on smuggled fuel, without the rest went to private accounts of those which it would have been brought to a standstill. involved, including some of the highest Montenegrin officials.

The smuggling channels in Serbia and Montenegro were established to circumvent the Figure 1: Oil smuggling routes international sanctions and as to the Federal Republic such gave the appearance of of Yugoslavia serving the interests of the state. Smuggling did in fact Austria generate revenues which were Slovenia used for financing a number of Hungary Romania state services (from security forces to state-owned media) Zagreb 7. and state-run enterprises, but Croatia 1. Novi sad above all, smuggling financed the ruling regime, since the 2. 7. Banja luka increasing share of the profits Beograd was diverted to various private Bosnia- bank accounts abroad. Hercegovina Sarajevo Split Serbia 6. * * * 5. The Southeast European coun- Monte- tries which have not been negro Pristina Sofia Podgorica 5. involved in the war nor were Kosovo Bulgaria they subject to international Adriatic sea Skopje sanctions were nevertheless 4. strongly affected by both. The 3. Tirana Macedonia Bari proximity to the war zone and the possibilities the sanction- Italy busting offered to the well- Albania Tessaloniki Lecce Vliora placed individuals and groups influenced the rapid development of smuggling and other illegal activities, as well as pro- 200 km

14 liferation of organized crime and corruption in Channels for trafficking people to Greece and Macedonia, Albania, Romania and Bulgaria. Italy were also set up almost immediately after the collapse of the communist regime. The traf- During the war in Bosnia-Herzegovina, ficking of people to Italy was developed in coop- Macedonia was involved in the illegal arms eration with the Italian organized crime, especial- trade. According to press reports, three ly with the Sacra Corona Unita clan. The first con- Macedonian ministers of defense, one foreign tacts were connected with the Italian mafia’s pur- minister, the head of intelligence service and one chases of weapons and explosives from their MP were involved in the illegal weapons trade. Albanian partners, who had easy access to According to estimates of the international organ- Albanian arms depots due to their close ties with izations, Macedonia was among the most the former Sigurimi. The cooperation soon active violators of sanctions imposed on the extended to include drugs and illegal immigrants. rump Yugoslavia. The Serbian-Macedonian border witnessed the countless not-too-hidden pas- The severity of Ceausescu’s regime in Romania, sages of whole convoys of tank trucks, organiza- the pauperization and shortages, created by the tion of which would have been impossible with- mismanagement of the command economy and out the involvement of government officials. the drive to repay the Romanian foreign debt cre- Numerous Macedonian “businessmen” partici- ated the extremely fertile ground for proliferation pated in a popular scheme used by thousands of of trans-border organized crime. Unable to buy Serbian entrepreneurs for side-stepping the sanc- raw materials and to sell their products on open tions. The scheme involved an establishment of a market, numerous large and small state-owned phantom company in Skopje. The Serbian goods enterprise managers participated in development (which could not be legally exported) were smug- of a huge black market. Many agents of the gled across the porous Serbian-Macedonian bor- Romanian Department of State Security, popular- der and then exported, branded with the Made in ly known as Securitate, also played an exception- Macedonia label. For few years, this scheme was ally important role in its development and expan- one of Macedonia’s main foreign currency earn- sion to include money laundering and cigarette, ers. Needless to say, all these activities had an drugs and arms smuggling schemes. Cigarette, enormous impact on the spread of corruption in drugs and arms smuggling was initiated in 1970s Macedonia. with the goal of obtaining hard currency for Securitate’s covert operations abroad. Yet, The majority of the Albanian smuggling chan- because the poor living conditions in Romania nels were developed by the former agents of the were so widespread, even the privileged Albanian secret service Sigurimi. Sigurimi was Securitate agents were affected, and this gave abolished in July 1991 and replaced with the them a strong incentive to abuse their positions National Intelligence Service (NIS). As a result of and to begin diverting the funds, generated this restructuring, many of the approximately through smuggling, to their personal bank 10,000 Sigurimi agents lost their positions and accounts abroad (mainly in Switzerland). turned to organized crime, often in partnership with the Italian organized crime, which has Like all other Serbian neighbors, Romania also entered Albania almost immediately after the col- exploited the opportunities offered by the inter- lapse of the country’s Stalinist regime. The smug- national sanctions imposed on the rump gling of oil to the rump Yugoslavia (especially to Yugoslavia. In the year 2000, the then-President Montenegro) soon became the most lucrative Constantinescu accused his predecessor, Ion activity in the northern Albania. The realization of Iliescu, and the former Foreign Minister this project would not be possible without partic- Melescanu of being involved in the oil smug- ipation or at least without the knowledge of gling to Serbia. Such allegations are not uncom- authorities in Podgorica and Tirana. According to mon in the Southeastern European political the source in the Albanian railway company, infighting and should be treated with caution. Yet, more than 1 million liters of oil were transported it is hard to believe that the largest operation, from Durres to Montenegro in September 1994 involving around 1,000 railway wagons loaded alone. The involvement of government officials with fuel and which, as subsequent investigation and the former Sigurimi agents, who were has revealed, crossed from Romania into Serbia appointed as the leading figures of the customs at the Jimbolia border crossing, could have been and tax authorities, was confirmed by Genc Ruli, performed without the knowledge of some of the the former Finance Minister in Sali Berisha’s gov- most senior Romanian public officials. ernment. Romania was also among the largest exporters of arms to all warring sides in the former Yugoslavia

15 during the arms embargo imposed on them. The ishment of tight restrictions on movement of illegal arms exports were controlled by former goods and people (especially in the case of Securitate and army employees. Viktor Albania and Romania) at the same time removed Stanculescu, the former head of the quartering many obstacles which hitherto prevented people corps for Romanian army and a member of the from engaging in the shadow economy. In the tribunal which sentenced Ceausescu to death, first years of transition, smuggling was a nation- became the owner of several leading arms wide phenomenon tolerated by the authorities to exporting companies (all of which were selling avoid the social upheaval among the pauperized weapons to Croatia and to Serbia) almost imme- population, which had little choice apart from diately after the revolution. engaging in small-scale oil smuggling to the rump Yugoslavia and in the “suitcase trading.” Of The smuggling channels in Bulgaria were set up course, the corrupt involvement of numerous by the communist state and were controlled by high-ranking government officials in the large- the former State Security – the secret service of scale smuggling operations is another, even the communist regime. Regretfully, proof of this more significant reason why in the early 1990s criminal activity no longer exists. Only accounts virtually no attempts to counter smuggling - and of anonymous participants in the smuggling corruption that made it possible - were made. channels and some indirect evidence are available today. There are also the accusations by 2.2. Expansion of Trans-Border Organized western states of smuggling of arms, drugs, med- Crime and Corruption: Causes and ications, and excise goods. Course

In the period 1987-1989 certain individuals were The trans-border organized crime networks, set granted control over part of these channels and up semi-officially with the knowledge and often vast authority to dispose with the undercover even active participation of the highest state offi- companies. This allowed them to appropriate for- cials, were soon “privatized” by certain well- mer secret funds into personal accounts. placed individuals and groups within or closely Following the collapse of the totalitarian system connected to the ruling elites. The process of “pri- and the subsequent transformation of the State vatization” of the smuggling channels was well Security structures in the period 1990-1993, thou- underway by 1992 in all the regional countries sands of police officers were made redundant or and largely concluded by 1995 (the only excep- left the Ministry of the Interior, taking with them a tion was Kosovo where the process could be large part of the archive files on agents, connec- observed between 1997 appearance of the KLA as tions, and mechanisms for evading border con- an important regional player and the 1999 NATO trol. At the same time, the ensuing vacuum in the campaign). During the same period, the channels exercise of control functions by the state, as well initially established for smuggling predominantly as the economic recession, especially in 1989- weapons and oil were expanded to include other 1991, created favorable conditions for illegal goods, such as drugs, stolen vehicles, cigarettes, trafficking in goods intended to meet the alcohol and other commodities. The origins of the domestic demand for a wide range of products. constantly growing Balkan trade in human beings While until November 10, 1989, when the can also be traced to the 1992-1995 period and to Communist regime fell, the State Security was the lucrative business of “assisting” refugees to mostly engaged in trafficking to other countries escape from the war zones to safety. Thus, trans- and transiting of drugs and banned goods, after border organized crime and corruption started to that date the same smuggling channels came to seriously undermine the normal functioning of be used for the illicit import of anything that could the states in the region. be sold in Bulgaria. Evading payment of customs and excise duties and fees, certain circles of for- While the regimes, which were actively engaged mer police agents and party activists earned ille- in development and organization of the smug- gal profit and accumulated huge financial gling channels, remained in power, virtually no resources. attempts were made to stem trans-border crime and the corruption that facilitated it. In Croatia, Macedonia, Albania, Romania and Bulgaria had Bosnia-Herzegovina, Montenegro and Serbia, to face numerous difficulties when they started where due to the specific circumstances (involve- their transition to the market economy. The swift ment in the war being the most important one) political and economic changes, the rising unem- the same regimes remained in power for almost ployment, and the rising discrepancy between the whole decade, all the attempts to check the wages and prices pushed many people into the flow of smuggled goods were only cosmetic, if gray economy and on the black market. The abol- made at all. In countries, where governments did

16 change (Albania, Bulgaria, Macedonia, Romania), trade. Furthermore, even the general public, the some measures to stem proliferation of smug- civil society and the majority of opposition parties gling were taken. Unfortunately, in most cases hardly ever raised the issue, despite the fact that these measures were ineffective, and led only to it was already more than clear that the only sur- the change of people involved in the smuggling. vival the trans-border organized crime made possible was the survival of Milosevic’s regime. The The Croatian authorities justified the proliferation explanation for this might lay in the fact that huge of smuggling and their virtually complete inabili- segment of the population was either directly ty (or unwillingness) to put an end to it with the involved in or dependent on smuggling (predom- fact that Croatia was still engaged in the armed inantly small-scale or so called “suitcase” smug- conflict and that more than a third of Croatian ter- gling). ritory was not under their control. Liberation of these territories was declared as having the In Kosovo, the KLA’s armed insurrection and the absolute priority and all other issues, including consequent clashes between the KLA and the the fight against corruption, organized crime and Yugoslav security forces destroyed even the last illegal trade, were conveniently put off to some vestiges of law and order in the province, giving unspecified future. Little has changed after the the drug smugglers an almost completely free war ended. Many of the high ranking individuals reign. The alleged goal behind the drug trade con- engaged in smuggling and other criminal activi- tinued to be the “liberation” of Kosovo from the ties enjoyed complete immunity from prosecu- Serbian “occupation” while in fact it served pri- tion, due to their “defenders of the homeland” marily for personal enrichment of the members status. of 15 clans, allegedly controlling both the drug trade and the KLA. Prior to the UN Mission in Before the Dayton Agreement, which ended the Kosovo (UNMIK) taking over the administration war in Bosnia-Herzegovina, any attempt to put an of the province in 1999, effectively no authority end to illegal trade was unthinkable. No legisla- existed which could possibly try to curb the drug tion, no police force, no customs services, and traffic. even no clearly defined and recognized borders existed. Above all, there was absolutely no will- In Albania, the weak government, inadequate and ingness on the side of the authorities to tackle the non-enforced legislation, corrupt and ill-equipped problem. Trans-border organized crime and war security forces and dire economic situation all formed a closed circle in which the war generated contributed to creation of a perfect environment the need for smuggling and the profits smuggling for proliferation of organized crime. The involve- was bringing to those involved generated the ment of the highest representatives of the gov- need to prolong the war for as long as possible. erning Democratic Party in smuggling and other After the war, the provisions of the Dayton criminal activities prevented any serious action Agreement, which aimed above all to preserve against the illicit trade before the 1997 collapse peace and stability in the country, created condi- and the subsequent change of the government. tions in which any serious action against organ- The 1997 events exacerbated the problem to an ized crime and corruption was made virtually extent that the new, Socialist government, even if impossible. Complicated political and administra- we assume that it was actually wiling to do so, tive arrangement, division of the country on two was completely powerless to do anything on its entities (of which the Croat-Muslim federation own and the international community had to step was further divided into 10 cantons), as well as in. The most important development was the the more pressing issues like post-war recon- establishment of European Commission’s struction, return of refugees and displaced per- Customs Assistance Mission in Albania, deployed sons, and preservation of peace, sidetracked the in June 1997 on request from the new Albanian fight against organized crime, smuggling and cor- government. ruption. These issues were not addressed properly until the end of the decade. During the rule of the Party for Social Democracy (PSDR, the former communists) in Romania, In the Federal Republic of Yugoslavia, the interna- which lasted until the 1996 elections, numerous tional sanctions offered the same excuse the war ties were forged between some governing offi- offered to the elites engaged in the illicit trade in cials and the shadow economy structures. The Croatia and Bosnia-Herzegovina. Smuggling was former provided the latter with easy access to “necessary” to help Yugoslavia survive under the unsecured credits from the state banks (three of “unfairly” imposed sanctions. While Milosevic’s the main state banks were driven to the edge of regime was in power, not surprisingly, no bankruptcy because of this practice), with legal attempts were made to fight against the illegal “blessings” for their trading monopolies, and

17 with the preferential treatment in privatization corruption exists even in the higher ranks of pub- procedures. The new Romanian “business” class lic officials. provided their political mentors with funds for their electoral campaigns and other, official and The smuggling of goods has inflicted consider- unofficial, needs. In such an environment, the fact able damage to economies of the SEE countries. that hardly any measures were taken to curb cor- It is often accompanied by trafficking in banned or ruption and the gray economy, including smug- controlled substances and items; criminal acts; gling and trafficking, hardly comes as a surprise. competition between the organized smuggling groups, and between traffickers and lawful In Bulgaria, where six regular and two interim importers. Moreover, in order to stay in the mar- cabinets were in power in the period 1989-2001, ket, lawful importers are forced to resort to viola- the following pattern could be observed every tions of the established foreign-trade regulations. time the government changed (the situation was very similar also in other countries): Trans-border organized crime has a destructive effect not only on the economy, but also on the The electoral campaign, in which promises to institutions and the rule of law in a given country. fight corruption and organized crime play an The huge resources accumulated in this manner exceptionally important role, in fact intensifies allow engaging in covert financing and refinanc- the activities of the trans-border organized ing of various types of legal and illegal undertak- crime networks, since those involved try both ings. This is largely due to the fact that the rev- to build up “reserves” for an uncertain future enues from smuggling do not enter official gov- and to take advantage of the ensuing power ernment statistics; they are never declared and vacuum between the elections and the inau- thus never registered with the relevant authori- guration of the new government. ties. Practice shows that all too often proceeds from illegal trafficking serve to finance political When the latter takes place, some swift and parties, labor-unions and other organizations in highly publicized steps are taken – some con- SEE. Illegal import adversely affects domestic traband channels are broken, some of the production and harms sectors of strategic impor- involved (most often including some customs tance to the country. In its various forms it is in officers) might be dismissed or arrested. fact one of the means companies employ to enter a given market. It is also used to monopolize a The smuggling and corruption, however, are certain economic or other sector of activity – for rarely significantly effected. Rather, new peo- instance the trade in alcohol, cigarettes, grain, ple, close to the new authorities, take over the sugar, video and audio equipment. smuggling networks. The goods most frequently subject to smuggling 2.3. Trans-Border Organized Crime and are those with high import tax rates (cigarettes, Corruption in Southeastern Europe alcohol, motor vehicles), goods subject to national bans and restrictions such as arms, narcotic Trans-border organized crime and corruption are substances and precursors, pornographic materi- intrinsically connected. When something is to be als, subsidized goods, protected animal species transported out of or into the country in order to and plants, goods and technologies of civil and avoid payment of customs duties and other fees military use, works of art and objects of cultural and taxes, it very often requires the assistance of and historical value, strategic raw materials, border and other officials from various govern- forged goods and products violating intellectual ment agencies – passport control, immigration, property rights, goods subject to international customs, etc. Corruption is particularly common control, nuclear and radioactive materials, haz- in the case of smuggling of commercial goods. ardous and toxic substances and wastes, hi-tech products, etc. Smuggling-related corruption is found at every level of the public administration in the region. Illegal import can be carried out at any time and The claims that corruption only implicates the anywhere along the border, with the actual places rank and file of administration while top manage- of occurrence falling in two main zones – points ment levels are supposedly “immune” against it where customs control is executed (ports, air- are incorrect. The series of disclosures concerning ports, border checkpoints, free trade zones, and corruption and personal gains on the part of sen- others) and points outside customs control – a ior public officials, the striking rise in their stan- remote location along the coastline, a minor port dard of living, and the information about funds or airport. and property they have acquired all suggest that

18 Depending on the nature of smuggled goods, as Certain enduring and recurrent schemes of com- well as on the initial and final buyer (destination), bining the interests of traffickers and corrupt offi- citizens of different states are engaged as perpe- cials exist. Moreover, the linking and interaction trators. In a number of cases the citizenship of the of interests follow a definite logic. There is a con- person used for the smuggling is of great signifi- nection between the level of organization of cance insofar as there are visa restrictions on the smuggling activity and the officials involved in movement of persons and goods in certain corruption. regions of the world - for instance, the Schengen Agreement. Illegal trade with a final destination in The so-called “suitcase trade,” in which hundreds a Schengen country usually involves nationals of of thousands of individuals in the whole region these countries, or persons frequently traveling are engaged, typically involves one, and occa- to these countries. sionally more than one, family member. They establish contact with individual representatives A key factor for increasing or reducing smuggling of customs authorities and other control agen- is the adequacy of customs control in the detec- cies, effecting a corruption deal. Regardless of the tion, detainment, and seizure of illegally imported actual role of the public official – whether passive or exported goods. Typical for Southeast Europe or active under criminal legislation definitions – is the hierarchical corruption pressure on the offi- the smuggler pays a certain “fee” to the official cials exercising the border control, the lack of authorizing the illegal transfer of the goods. coordination among the various agencies, the lack of established and effectively functioning The use of smuggling channels in SEE involves a information systems and information dissemina- more complex chain of corruption deals, includ- tion networks, inefficient internal control mecha- ing the redistribution of the bribes received. nisms, and inadequate resources and facilities. This chain implicates officials from different agen- When traffickers realize that control is weak, that cies, who supply railway tanks, transport corri- corruption is rampant among customs officers, dors, terminals for the loading and unloading of and that they run a low risk of being intercepted fuel. All too often public officials illicitly work for and punished, the situation in the state is consid- the owners of the smuggling channels, which ered favorable to engaging in smuggling. This is have been “privatized” by semi-criminal and mostly been the case in SEE throughout the criminal groups. A stable system is thus formed 1990s. of a dual loyalty of key officials: legitimate, to the state; and covert and illicit, to the group that All forms of trans-border crime that take place bribed them. with the awareness and assistance of officials involve the commission of a crime – bribery or The third, and most dangerous, form of interac- misuse of public office. In the cases of mass tion between traffickers and public officials is the smuggling, and especially in the trafficking in illicit transfer of goods which benefits the political fast-moving consumer goods, there are simulta- elite of the country and is thus protected by a neous violations of the customs and criminal leg- political “umbrella.” Those instances involve the islation. so-called “grand corruption.”

The speciﬁc forms of corruption in SEE can be Below four categories of smuggling and related summarized in several more general types of corruption in SEE are examined in more detail. criminal interaction between smugglers and public ofﬁcials: Mass Smuggling (“The Suitcase Trade”)

Corrupting the customs administration in Mass smuggling is a specific form of the illegal order to speed up a certain operation, includ- trade in goods. Its significance is often underesti- ing the processing of documents, and thus mated, despite the fact that it constitutes a con- allow a businessperson or organization to con- siderable part of the illegal imports and exports in clude a given transaction in the fastest possi- Southeast Europe. Suitcase traders cross-borders ble way. daily (sometimes even several times in the same day). Upon each crossing, they transfer merchan- Corrupting officials in order to cover up viola- dise for which no customs duties and other fees tions of customs laws and internal regulations. are paid. Instead, a bride is often paid to the border police and customs officials. Suitcase traders Participation of border and customs adminis- make additional profit due to the price differences tration in the setting up and operation of of the smuggled goods on both sides of the bor- smuggling channels across the border. der. The goods most often smuggled in this man-

19 ner include gasoline, household consumer exist that it is controlled by the organized crime goods, foodstuffs and beverages, fruits and veg- structures, which have evolved from the KLA and etables, clothes, medicine, etc. The goods subject which are closely connected with the local politi- to import and export bans may also be involved. cal elites. Kosovo smugglers are making huge Turkey plays the role of the most important profits through customs frauds, which UNMIK regional “shopping center,” with suitcase traders (the United Nations Mission in Kosovo) has so far from Bulgaria, Romania, Macedonia, FR been unable to tackle. In 1996, the governments in Yugoslavia and Albania contributing an important Belgrade and Skopje signed an agreement share to the enormous turnover the suitcase according to which a flat one percent duty is trade generates in Turkey (according to the Turkish charged on all goods, traded between the two statistical data, the volume of suitcase trade countries. UNMIK respects this agreement and is between $8 and 9 billion per year). consequently, the same low duty is levied on all imports from Macedonia, Serbia and Montenegro All countries in SEE have been affected with this to Kosovo. The duty for imports from all other phenomenon to a greater or lesser degree. In countries is 10 percent. The smugglers use this some, however, the suitcase trade reached such and forge documents and stamps to present proportions that it begun to seriously threaten the goods (including even bananas and oil), coming local economy. Croatia is such an example. In the from other countries, as originating in second half on the 1990s, Croatia became Macedonia. In first four months of 2001 alone, arguably the most expensive transitional country over 200 false certificates, issued by the in which a rapidly growing number of people Macedonian customs authorities, have been found it increasingly difficult to get by. The solu- detected. The situation is even worse on the “bor- tion was found in the virtually nation-wide phe- der” with Serbia, where, due to the still unclear nomenon of “suitcase” smuggling, with scores of status of Kosovo, only semi-official “control Croats daily visiting Bosnia-Herzegovina, points” exist, at which the taxes collected by the Hungary and even Slovenia to buy food and other “border officials” end up in their pockets, instead commodities. The exceptionally high prices in of in the Serbian and Kosovar budgets. Croatia were partly a result of war and the consequent destruction of industries and infrastructure, Some estimates about the range of suitcase and partly of the rampant corruption and the smuggling and customs frauds in Albania can be related “tycoonization” of Croatian economy, made from the data on collected customs rev- which resulted in majority of enterprises being enues. The reforms in the customs and tax plundered and brought to bankruptcy. The result- authorities, initiated in 1997 by the new Socialist ing corruption of the law-enforcement adminis- government with the assistance of international tration has become extremely difficult to over- institutions, soon produced some tangible turn. results:

For years, Croatian authorities did nothing to curb In 1996, customs revenues were only $10 mil- the “suitcase” trade, despite the losses it was lion. bringing to its domestic production and to the state budget. On the contrary. Viewing the “suit- From September to December 1997 alone, $28 case” trade as a safety valve for preventing the million were collected. social upheaval, Croatian authorities even made custom frauds and smuggling much easier by However, the estimated losses from unpaid opening around 200 border crossings, of which customs duties for 1998 were still over 108 between Croatia and Bosnia–Herzegovina $80 million, and the extent of smuggling and alone (in addition to numerous official crossings, corruption in Albania continues to be higher there were up to 400 unofficial points of entry than anywhere else in Europe. between Croatia and Bosnia–Herzegovina where goods were smuggled in or out of the country). One of the ways to estimate the scope of the suit- Only 20 of them were properly equipped for con- case trade is the number of “exits” from the coun- trol of passengers and goods. Due to the lack of try. In Bulgaria, such research was conducted by customs officials, many border crossings were the Center for the Study of Democracy and based controlled only by the police who rarely did any- on the information supplied by the National thing but check the identity of the passengers. Statistics Institute. In 1996 and 1997 more than 3 million exits were registered. Most of the visits of Mass smuggling in Kosovo represents perhaps Bulgarian citizens were made to the neighboring even a more pressing problem than anywhere countries: about one third of all departures were else in the region, because numerous indications to the Federal Republic of Yugoslavia, 17 percent

20 to Turkey and 15 percent to Romania. In nine out in a (real or non-existent) domestic factory, and of ten cases, “tourism” was the reason cited for not abroad as it is really the case. the trip. Yet, “tourism” can be regarded (to an extent) as a valid reason only in the case of Representatives of the World Bank and the IMF Turkey, which is in fact a popular tourist destina- estimate that Bosnia-Herzegovina loses around tion. In cases of Yugoslavia and Romania, the $250 million annually because of the illegal numbers offer a very good indication of the cigarette imports.1 For example, every month potential scope of the suitcase trade. According to approximately 280 tons of cigarettes, produced in this estimates, there is reason to claim that the Croatian tobacco factory Tvornica duhana between one fourth and one third of 900,000 peo- Rovinj, are sold in the republic. However, only ple engaged in the private sector are involved in around 100 tons are legally imported every the suitcase trade. This makes it the largest sec- month. tor of the Bulgarian economy in terms of the number of people engaged. A large number of After the fall of Milosevic’s regime, the new small and medium-sized enterprises in Bulgaria Serbian authorities took numerous measures to depend on suitcase trade. cut the cigarette smuggling channels and to regu- late the trade with cigarettes and other high-duty Smuggling of Excise Goods commodities:

The goods which are smuggled most often are According to the Serbian Prime Minister mainly those that tend to undergo transforma- Djindjic and the head of the Federal Customs tion, or are completely consumed, when used. Administration Begovic, the share of the ille- Such are fuels and lubricants, alcoholic and non- gal cigarettes on the market decreased from alcoholic beverages, foodstuffs, raw materials for 65 to 15 percent by September 2001. the production of goods, etc. In other words, when they appear in the market and are sold, In 2000, just slightly over $400,000 were col- they are difficult to identify, and since they subse- lected from duties on cigarette import. quently disappear they cannot be tracked down should it be established that they were imported In 2001, the sum was 32 times larger (almost illegally. The second important characteristic of $13 million). most often smuggled goods are the high import tax and duty rates (so-called excise goods). In 2001, 5,313 tons of cigarettes were legally Cigarettes and other tobacco products have both imported, against the 3,078 tons for the whole of these two features. It is thus hardly surprising period between 1995 and 2000. that cigarette smuggling became one of the most profitable and widespread illegal activities in the Numerous arrests were made and over region. 500,000 boxes of cigarettes confiscated.

The cigarette smuggling in the region involves Still, according to estimates of G17, a Serbian both the locally produced cigarettes and the think-thank involving many of the country’s top major international brands. The schemes for economists, Serbia still looses $120 million smuggling locally produced cigarettes usually annually in revenues due to the illegal cigarette involve “export” to a neighboring country, fol- import.2 lowed by illegal transport of these same cigarettes back into the country of origin. Cigarette According to the estimates, 95 percent of ciga- smuggling was facilitated with the existence of rettes smoked in Kosovo were smuggled into the several borders in the region, which were deliber- province. Most of these cigarettes entered the ately kept porous for political reasons (border province from Serbia. between Croatia and the Croat-populated Herzegovina, border between Serbia and the According to the data of the former Macedonian Serb-populated Republika Srpska, and the border Interior Minister Trajanov, between June and between Serbia and post-1999 Kosovo). Another September 2000 alone, more than 1,300 trucks of popular customs fraud, used in cigarette smug- cigarettes were exported duty-free to Serbia and gling, is to present cigarettes as being produced Kosovo and then smuggled back into Macedonia.

1 Elizabeth Sellwood Oxfam. “Policy Recommendations for Sustainable Post-Conﬂict Reconstruction in South Eastern Europe," International Security Information Service. 19 February 2001. . 2 Tatjana Stankovic. "Reforme iza dimne zavese." AIM Press. 30 September 2001. .

21 There, they were sold on the market by small grant forms of smuggling, with entire shipments traders and street vendors. Trajanov estimates smuggled into the country, with documents being that the organizers of the smuggling (who are, forged with false customs seals and with involve- according to him, closely connected to the two ment of ghost companies. ruling parties) pocketed $57 million of profits. The cigarette smuggling in Montenegro has One of the biggest Romanian smuggling scan- reached such proportions in the last decade that dals of 1990s involved the illegal import of ciga- the tiny republic has acquired an infamous name rettes and had dealt a significant blow to the of the “Cigarette Empire” in the international administration of President Constantinescu. It press, with allegations of the direct involvement involved smuggling of cigarettes worth several of the republic’s highest government officials in millions USD to Romania through the Otopeni this illegal activity often being made. According military airport near Bucharest. to the estimates, Italy looses a few hundred millions USD annually in unpaid taxes due to ciga- According to the most conservative estimates, rette smuggling. The German government’s cus- the annual sales volumes of cigarettes in toms investigator, dealing with the cigarette Bulgaria are about $120 million. The imported smuggling, estimates that in the years 2000 and cigarettes sales amount to 15 percent of the ciga- 2001, the EU lost $3.4 billion because of the rettes sold ($18 million). Yet, in 1998 the value of unpaid taxes for cigarettes smuggled from the legally imported cigarettes was only about Montenegro. In December 1999, the former $2.5 million, which means that only 14.1 percent Montenegrin Foreign Minister Branko Perovic of the imported cigarettes, sold in the country, was indicted on charges of cigarette smuggling have been registered with the relevant authorities and racketeering by the Public Prosecutor in and that the proper taxes have been paid. The sit- Naples. In May 2002, the prosecutors in Bari uation even worsened in 1999. A comparison opened an investigation against Montenegrin shows that the duties paid by October 1999 had President Milo Djukanovic in regard with his dropped by about 35 percent compared to 1998. alleged involvement in a cigarette smuggling ring The cigarette import often involves the most fla- and links to organized crime.

The Smuggling of Illicit Figure 2: Heroin smuggling routes Drugs through Southeast Europe 200 km The Southeastern Europe Ukraine Wien Bratislava Moldova is a bridge between the

Budapest Middle Eastern and Austria Central Asian drug pro- Hungary ducers and the Western Slovenia Zagreb Ljubljana European drug con- Croatia sumers. The heroin pro- Banja luka Beograd Romania duced in Afghanistan trav- Bosnia- Bucharest Herzegovina els through Iran to Turkey, Sarajevo Split Serbia where it is reﬁned, and Monte- Nish Varna then to Bulgaria. Pristina Sofia Burgas Pescara negro Bulgaria Black sea PodgoricaKosovo Adriatic sea Skopje Bulgaria is the crossroads Italy TiranaMacedonia Bari where three main drug

Lecce Albania Tessaloniki smuggling routes through Vliora the Balkans separate: Greece Ionian sea The bulk of the Asian Turkey heroin traveled from Bul- Mediterranean garia through the former sea Yugoslavia prior to 1991. During the war in Croatia and Bosnia-Herzegovina, this route was temporary cut off and two alternative routes took over its pre- dominance. After 1995,

22 Figure 3: Smuggling of cocaine and marihua- One of the conse- na through Southeast Europe quences of the war in the former Yu- Wien Bratislava Ukraine Moldova goslavia was that Budapest Austria 200 km now the illegal drug trade encom- Slovenia Hungary Ljubljana Zagreb passes all the Rijeka Croatia countries in the region. Political in- Banja luka Romania Beograd Bosnia- Bucharest stability, poverty, Herzegovina Serbia Split Sarajevo corruption, weak Varna democratic institu- Nis Monte- Pristina tions, insufficient negro Sofia Burgas Black sea Pescara Kosovo Bulgaria and poorly Podgorica Adriatic Skopje Plovdiv equipped security Italy sea Tirana Macedonia Bari forces and ill- Tessaloniki Lece Albania guarded, porous Vlora borders made the Turkey region ideal for Greece Ionian sea drug smuggling.

Patra The drug trade enabled the inter- Mediterranean sea national organized crime (especially Locally produced marihuana the Italian mafia, South-American cocaine and Turkish and Middle Eastern drug smuggling networks) to this “classical” route was again revived, and establish its presence in the region, adding fur- after 1997, a sharp increase in drug trafﬁc ther incentive to the vicious circle in which cor- through former Yugoslavia was noticed, testi- ruption and organized crime reinforce each other. fied with the increasing number of drug Trafﬁc of heroin through the region represents seizures, as well as with a drastic increase in the biggest problem, but it is far from being the drug consumption in the major urban areas. only one:

The northern route leads through Romania - According to Interpol estimates, over 80 per- and from there either through Hungary to cent of heroin, sold in the EU, has traveled Czech Republic and Slovakia (and from there through Balkans. to EU countries) or through Ukraine to Poland (and from there to EU). - Some of the regional countries, most notably Croatia and Albania, also became the most The southern route leads from Bulgaria important European points of entry for the through Macedonia and Kosovo to Albania. South American cocaine. After becoming de facto independent from Yugoslavia in 1999, Kosovo reaffirmed its - The Southeast Europe has also turned into an “role” as the center of the Southeast European important drug producing region, especially of drug smuggling networks. The International cannabis and opium poppies. Narcotic Enforcement Officers Association estimates that the Kosovo mafia handles - Laboratories for production of synthetic drugs between four and a half and five tons of have also appeared. heroin monthly now, which is more than double than before the 1999 war. The drug - The increased traffic in drugs has led to in- smuggling is closely connected to the 2001 creased local drug consumption, and especial- conflict in Macedonia. Numerous indications ly the pace at which heroin abuse is spreading exist that like the KLA, the so-called National is alarming. Liberation Army in Macedonia was closely connected with the drug trade.

23 Trafficking in Human Beings organizers inside the country as a rule get a share of the proceeds. Trafficking in people is growing with alarming speed. It includes the transfer of illegal immi- The trafficking in people is very often done in grants, women to be engaged in prostitution, secret compartments of buses and trucks. labor force to work under inhuman conditions, Typically the “shipments” are accompanied by trafficking in children, and illegal adoptions at the organizers of the channel or other trusted exorbitant prices. The illegal flows are under con- individuals by car. They escort the “shipment” to trol of organized crime. Trafficking in people the border checkpoint and wait until the vehicle involves officials from passport control services crosses the border. The clandestine migrants are who accept forged identification documents. The often accompanied by their children, have little persons involved in trafficking in people often baggage and carry no money or identification have double citizenship and use different names. papers with them. Young women who have been Involved in the traffic are companies providing kidnapped and forced to engage in prostitution visa services and tourist agencies. Traffickers use also cross the border illegally. networks of trusted hotel owners and people renting private lodgings. Trafficking in Illegal Immigrants

The clandestine leading of people across the bor- According to the UN Office for Drug Control and der is done by traffickers that are often repeat Crime Prevention, human trafficking is the fastest offenders who continue to engage in this type of growing criminal business in the world. activity. The crossing of the border by land is typ- Southeast Europe is one of the most important ically done in groups led by a guide who is famil- transit regions for illegal immigrants from Turkey, iar with the area to be traversed. He is connected China, Iran, Pakistan, Bangladesh, Iraq, to a centre of operations in one of the large cities Afghanistan, and other Middle Eastern and Asian where the grouping of the potential migrants is countries on their way to the EU. It is also an carried out. Candidate migrants usually have a important source region, with Romanians, meeting point – a railway station, restaurant, or Albanians and Roma being among the most private house. There they are boarded on means numerous groups of illegal immigrants in the EU. of transportation and finally placed in the charge Among the reasons for the exceptionally fast of the guides. The channels for the trafficking in growth of human trafficking business is that the people are controlled by organized crime and the profits are incomparably higher than risks and costs involved. Unlike drug smuggling, Figure 4: Trafficking in illegal immigrants human trafficking is considered in through Southeast Europe most countries as a minor infraction Austria which carries light sentences. No spe- Slovenia Hungary cial equipment is needed and no Ljubljana Zagreb organized network for distribution (like Croatia in the case of drugs) is essential. In Bania luka Romania case of danger, the immigrants (who Beograd Bosnia- Buckarest pay in advance for the “service”) can HerzegovinaSarajevo Split Serbia be easily abandoned by their guides, Varna Monte- Nish and in practice, they often are. The Pristina Sofia Pescara negro Bulgaria Burgas Black sea financial gains made through the traf- Adriatic sea PodgoricaKosovo Skopje ficking are enormous. Estimates, Italy Tirana based just on the recorded cases Bari Macedonia Turkey (40,000 immigrants) only in Austria Albania Tessaloniki Lecce only for the year 1999, gave figure of $100 million. For the whole EU, esti- Greece Yonian mates are that traffickers earned $3 sea billion in 1999.

Due to their location, Bulgaria and Mediterranean Romania are the most important entry Sea points for illegal immigrants. Until recently, Bosnia-Herzegovina and 200 km Serbia were also significant entry points for numerous immigrants –

24 most notably for Iranians (Bosnia) and Chinese caught immigrants with heroin in their backpacks. (Serbia). The most popular land route leads from The explanation for this is that they are forced to Bulgaria and Romania through Serbia, Bosnia- act as couriers to pay for their passage. Herzegovina, and Croatia to Slovenia, and from there to Italy and Austria. Many illegal immi- Trafficking in Women and Girls for the Sex grants travel also across Hungary. Equally impor- Industry tant is the route across the Adriatic Sea. Numerous routes from Bosnia, Serbia and Trafficking in women and girls for the sex indus- Bulgaria (via Macedonia) therefore lead to try represents an even more alarming and dis- Montenegro and Albania, where well-established turbing aspect of the trafficking in human beings. channels for clandestine traffic across the sea In most cases, it involves coercion, violence and exist. humiliation of the victims. Trafficked women and girls are often forced into prostitution, held in The trafficking in illegal immigrants through slave-like conditions, and repeatedly raped, bru- Southeast Europe seems to be organized by the talized, denied food, water, sleep and medical same groups who were previously engaged in care, and sold like property by one brothel owner smuggling of weapons and drugs or in “assist- or trafficker to another. Many of them are girls ing” refugees to reach safety for a price during under 18 years of age, and numerous were either the war. Similarly, the same routes are being used tricked to leave their homes (with false promises and the same partners from the other side of the of well-paid employment or marriage) or kid- border are involved. This seems to be especially napped. In Albania and Kosovo, cases when fam- the case in the countries of the former Yugoslavia. ilies sold their own daughters or sisters to traf- In Montenegro and Albania, the traffic in illegal fickers were registered. By various estimates, immigrants across the Adriatic Sea to Italy is hundreds of thousands of women and girls are organized by the same people who are engaged trafficked across European borders every year. In in smuggling of drugs and cigarettes to Italy. most cases, women and girls from Eastern Additional proof that the same people are really Europe are trafficked to the EU, but many (espe- involved is offered by the findings of the Italian cially from the former Soviet Union) are trafficked authorities. According to the former Italian also to other Eastern European countries and Finance Minister, the gangs, operating the smug- “employed” in sex industry there. Often, the traf- gling across the Adriatic Sea often combine two ficked girls are forced into prostitution in Eastern businesses – the trafficking in illegal immigrants European countries for a certain period while on and the smuggling of drugs. Italian police has their way to the EU.

In recent years (after the end of the Figure 5: Trafﬁcking in women through war in the former Yugoslavia), traf- Southeast Europe Austria ficking in women from, into and through Southeast European states Slovenia Hungary Ljubljana Zagreb rapidly increased. The successor Croatia states of the former Yugoslavia

Banja luka (especially those with the signiﬁcant Brcko Romania Bosnia- Beograd international presence) have become Herzegovina Buckarest important destination countries for Split Serbia Sarajevo women and girls from Ukraine, Nis Varna Monte- Russia, Moldova, and Romania. Pristina Sofia Burgas Black Pescara negro Kosovo Bulgaria Adriatic sea Podgorica sea Belgrade became one of the most Skopje Italy important transit centres. Due to TiranaMacedonia Bari Turkey their location, Bulgaria, Macedonia,

Lecce Albania Tessaloniki and Albania also became crucial transit countries for trafficked Greece women. Ionian sea Considering the alarming pace with which trafﬁcking in women and girls is spreading, and the horrifying Mediterranean sea ordeal the victims of trafﬁcking have 200 km to go through, the realization of how little has actually been done by the

25 regional governments to fight trafficking comes works to emerge, primarily with the support of as a shock. In most of the countries, trafficking is political elites in these countries. still considered as having a lower priority as compared to the fight against more “serious” crime This process has affected all countries in the like the drug smuggling. region, albeit through different mechanisms – either as part of the achievement of state inde- * * * pendence or as abusing the opportunities provided by the international embargoes. Nevertheless, The above should be ample evidence that the transition developments in the countries have most potent source of corruption pressure in the taken different shape and were implemented with countries of Southeast Europe occurs on a varying speed. Thus, while this section reviewed transnational basis, mostly from cross-border the regional sources of corruption, the rest of the crime. This has its roots in the particularly violent report will summarize the national institutional transition from communism to democracy which and legal environments against which these allowed well-integrated regional criminal net- regional processes develop.