108TH INTERNATIONAL SEMINAR PARTICIPANTS’ PAPERS

CURRENT SITUATION OF TRANSNATIONAL ORGANIZED CRIME IN THE

Alberto Rama Olario*

I. INTRODUCTION far achieved, the maintenance of peace and order must be graranteed. Towards this The maintenance of domestic tranquility end, the Philippine National Police (PNP) and order is one of the principal created a parallel National Strategic Action responsibilities of government. To survive, Plan dubbed “POLICE 2000” which the Philippines must effectively counteract envisions the PNP as a professional, the corrosive elements that tend to gnaw dynamic and highly motivated police at its foundation, as well as the insidious organization. It is regarded as one of the forces that seek to undermine it from most credible institutions in the country outside. Towards the first objective, the today and ranked among the best in Asia. Philippine National Police, to which I belong, is one of the principal arms of the In effectively meeting our mission and Philippine government in its campaign vision to serve our country, we in the against lawlessness and criminality Philippine National Police believe that in throughout the archipelago. order to efficiently subdue all destructive elements in our society, utmost For the last four (4) years under the international cooperation with our leadership and administration of President neighbors must be made. These elements Fidel V Ramos, the Philippines had been include international syndicates who steadily rising in terms of economic operate in our country as well as yours. progress and stability, making it earn the There should definitely be a continuing and distinction of being one of the fast-rising harmonious coordination among all of us economic dragons in the Asia-Pacific in this endeavor. (through the President’s National Strategic Action Plan dubbed as “Philippines II. DRUG TRAFFICKING 2000”).It has likewise achieved lasting peace among all , as evidened in Drug trafficking and abuse are serious the most recent signing of the peace issues confronting both developing and agreement with our Muslim brothers in developed nations. Production, trade and Mindanao and the subsequent creation of consumption of illicit drugs is a threat to the Southern Philippines Council for Peace the well being of the global community, and Development (SPCPD),which ended undermining legitimate institutions, the decades-old rift. eroding social values and creating broader economic development problems. The To sustain the success that we have so Philippines is no exception in this regard.

* Deputy Regional Director Administration, For many years the fight against illegal Philippine National Police-Region XIII, drugs and their abuse has been the subject Department of the Interior and Local Government, of numerous discussions at the national as Philippines. well international level. Powerful drug

171 RESOURCE MATERIAL SERIES No. 54 syndicates with their vast resources, A. Drug Situation modern technology and information have reduced the world into a small community 1. Marijuana Production where they bring illegal drugs from one The Philippines is known as a major place to another in furtherance of their producer of high-grade marijuana. It nefarious activities without regard to continues to be one of the main drugs of national boundaries or domestic laws. abuse in the country due to its availability and low cost. Marijuana is grown in ninety Countries affected by the problem have five (95) drug source barangays located in adopted their respective measures, like the nine (9) regions of the country. These areas enactment of laws and other policies, to are the subject of our continuos eradication. include appropriate implementation by different governmental agencies and 2. Methamphenamine Hydrochloride instrumentalities. Regional and (Shabu) Smuggling. international coordination and cooperation This drug popularly known in the has been likewise resorted to in response Philippines as ‘shabu’ is illegally imported to this global problem. by some Filipino-Chinese syndicates from Hong Kong and Taiwan. Large supplies of According to a recent survey, drug methamphenamine hydrochloride (shabu) addiction is the second most important continues to come from illicit crime problem in the Philippines today. In manufacturing and processing centers 1992, there were only about 20,000 drug within the region, particularly from users, which increased to an estimated 1.7 mainland China (PROC). The PROC million in 1997. Out of the 17 million, continues to be a significant source of illicit roughly 1.2 million drug users are from the drugs intended for the Philippines. Hong youth population. Using 5 grams per month Kong and Taiwan remain as the staging per drug user as an estimate, and point of Chinese syndicates financing translating this to money circulated due to drug trafficking operations for smuggling drug use and trafficking, we have a multi-kilos of shabu for the Philippines. monthly consumption of 8.5 million grams There are also reports that these traffickers amounting to 17 billion Philippine pesos facilitate shabu to Pacific States and the monthly or 204 billion Philippine pesos USA. In 1995, the PNP Narcotics Group annually. seized more than 200 kilograms of shabu on different occasions. For 1996, the group There are three (3) roles the Philippines seized 300 kilograms of shabu worth 600 play in the illegal drug scene. First, as a million pesos as a result of major operations producer, exporter and consumer of launched against Chinese syndicates based cannabis products (marijuana). Second, as in the Philippines. This does not include an importer and consumer of the hundreds of kilos seized by PARAC and methamphetamine hydrochloride (shabu) other PNP territorial units. and other regulated drugs. Third, as a transit point for heroin and cocaine. The 3. Trans-shipment Point of Heroin and country’s penetrable seaports, airports and Cocaine long irregular coastline provides ideal The Philippines, due to its strategic entry and exit points for drug smuggling location in Asia, is a logical choice for a and an alternate transshipment area of trans-shipment point for heroin and international drug syndicates. cocaine. Heroin is usually shipped into the country from the Golden Triangle, through

172 108TH INTERNATIONAL SEMINAR PARTICIPANTS’ PAPERS the various airports and seaports. African Japan. and Thai couriers with American connections are also utilizing the postal C. Concealment Techniques services in transporting drugs. In 1994, a Internationally detected modes of -based Nigerian syndicate was concealment are generally employed by neutralized for transporting 15 kilograms drug traffickers, such as: of heroin worth almost 400 million pesos, i) Ingestion, leg casts and body resulting in the busting of an American- wrap. Nigerian Connection. Another major ii) Use of false bottoms of luggage, seizure was made in the early part of 1997, concealment in imported packages with the arrest of a Taiwanese national for and false cavities of furniture. transporting high-grade heroin worth 27 iii) Concealment in containers and air million pesos. He was arrested in a freights. controlled delivery operation participated in by the PNP Narcotics Group, Bureau of D. Government Countermeasures Customs, USDEA and Royal Thai Police. 1. Legislation Cocaine trans-shipment is being carried- In 1994, the government enacted the out either by ship or airplane. It is believed Republic Act 7659 which imposes the death that the destinations of these expensive, penalty on certain heinous crimes and drug illicit drugs are the rich nations of Asia, transactions involving a certain degree or more particularly Hong Kong, Japan and amount of dangerous drugs. Tiwan. In 1995, 14 kilograms of cocaine was seized in , presumably In 1996, the government created the left in haste by unidentified Chinese Special Dangerous Drug Court which shall traffickers. Seizure of 14 kilograms of try heinous drug cases against notorious, cocaine was made in 1996 in the big-time pushers. This will speed-up the Province. disposition of drug cases filed in different courts. B. International Drug Syndicates With the ratification of the 1998 UN 1. Chinese Triads Vienna Convention, the Philippine These ethnic Chinese syndicates are National Police, particularly the Narcotics mainly responsible for the smuggling of Group, is pushing for immediate legislation methamphetamine hydrochloride (shabu) of tough drug laws, i.e. legislation on asset into the country. forfeiture, financial management and wire- tapping. These laws will strengthen 2. Nigerian Connection prosecution and eventually, increase the These drug rings are engaged in the conviction rate in dangerous drug cases. smuggling of heroin from the Golden Triangle to the USA and Europe, using the 2. Law Enforcement Methods Philippines as a trans-shipment point. At present, the law enforcement pillar of the Criminal Justice System still adopts 3. Australian and Yakuza Drug the “Multi-Agency Approach” in its fight syndicates against the unabated drug abuse problem These groups are responsible for the in our country. The PNP, through the smuggling of Cannabis from the Narcotics Group, contributes a major effort Philippines to Australia, New Zealand and in the fight against the proliferation of

173 RESOURCE MATERIAL SERIES No. 54 illegal drugs, working hand in hand with i) Liberalized Policies on Firearms other law enforcement agencies like the Importation: The (PNP) now NBI, EIIB, Bureau of Customs, the AFP, permits licensed firearms dealers other Task Forces like the PARAC and to purchase all types of firearms PACC. Their respective anti-drug from abroad. As a result, operations are designed primarily to smuggling of foreign-made prevent and control trafficking of illegal firearms has considerably drugs, with an operational strategy of decreased since they are now supply and demand reduction and available in country in commercial international/regional cooperation and quantities. coordination. ii) Legalization of Domestic Manufacturing of Firearms: The III. FIREARMS SMUGGLING government has legalized local manufacture in the Province of This particular activity is carried out by in Central Philippines. This transnational crime syndicates smuggling has resulted in the regulation and US-made firearms into the country. better monitoring of locally-made Philippine locally-made handguns on the firearms. other hand are smuggled to Asian countries iii) Stricter Monitoring of particularly Japan, Taiwan, and other International Gateways: Entry ASEAN countries through the employment points of smuggled firearms are of middlemen tasked to ship out firearms now under strict monitoring by (transported by vessels), the the different Philippine law misdeclaration of cargo (usually consigned enforcement agencies. As a result, to fictitious personalities) and the from 1995 to 1996, a good number employment of jettison techniques. have been arrested in the country for gun-running and firearms The modus operandi of the Smugglers smuggling. Confiscated from them is the following: were around 256 firearms of different calibers, ranging from i) Firearms arrive in the Philippines caliber 38 to M-16 rifles, 1,600 as undeclared or misdeclared rounds of assorted ammunition items and included with other and 25 seacrafts. In the Southern goods, consigned to fictitious Philippines, for the past year, a names and addresses; total of ten (10) major arms ii) Firearms can also be dismantled shipments form Sabah, Malaysia into pieces and included among were reportedly made, three of metal items or machinery parts which were for the Moro National legally imported or exported; Liberation Front (MNLF) and iii) Firearms are sometimes thrown seven for the Moro Islamic from vessels at prearranged areas Liberation Front (MLF). some distance from the shore iv) International Cooperation/ where they are later picked up by Networking: The PNP has small boats and brought to developed increased international undisclosed places. police and USA authorities to identify and monitor the activities Government Countermeasures : of gun traffickers, to pre-empt or neutralize their gun-running

174 108TH INTERNATIONAL SEMINAR PARTICIPANTS’ PAPERS

activities and to exchange into the country. The immigration Bureau information related to syndicated has gathered intelligence information groups. This has resulted in a which revealed that members of foreign- positive tone. based human smuggling syndicates have v) Heightened Cooperation among been using the Philippines as a prime Philippine Law Enforcement destination for illegal aliens who want to Agencies and Military Units: The take advantage of the growing economic Armed Forces of the Philippines opportunities in the country. The Bureau (AFP), the PNP and other law of Immigration admitted that the enforcement agencies have technology used by these syndicates rivals intensified intelligence the governments in the processing of coordination to determine big- spurious passports, visas and immigration time as well as small-time stamps. It was also revealed that human smugglers and illegal gun smuggling syndicates were not only manufacturers. engaged in bringing undocumented aliens vi) Firearms Amnesty: Simultaneous into Philippines, but also foreign terrorists, with the implementation of fugitives from justice and drug lords. OPLAN PAGLALANSAG (or OPLAN “DISMANTLE”), the V. ILLICIT TRAFFICKING OF government offers amnesty to all WOMEN AND CHILDREN holders of loose or unlicensed This crime activity has a direct bearing firearms. on foreign countries. The modus operandi employed by the syndicates are either to IV. SMUGGLING OF ILLEGAL recruit Philippine prostitutes for MIGRANTS employment in Japan, Brunei and other In the Philippines, the Bureau of ASEAN countries or recruit foreign Immigration and Deportation has primary prostitutes from Colombia, Taiwan and responsibility for the administration and Russia to enter the sex trade in the enforcement of immigration, citizenship Philippines. Arrests of these foreigners and alien admission and registration laws. were made on separate occasions Recent incidents involing illegal migrants throughout 1995,1996 and 1997. included seventeen (17) Iranian nationals who were excluded from entering the Likewise, as recorded by our Social country and immediately deported after Welfare Department, there were fifteen they were found to be carrying fake (15) reported cases of pedophilia and child passports. Incidents of Filipino illegal , with sixteen (16) foreigners entrants to other countries like the US, arrested in 1995 alone. It is sad to note that Canada and other Asian countries also this is the adverse result, as reported by abound and are causing grave concern to the Defense for Children International, of the immigration authorities of the affected young Filipino girls being recruited by countries. international prostitution syndicates and advertised as virgins in Spartacus In the Philippines, the Bureau of Magazine, a widely circulated immigration authorities have sought the pornographic magazine, which the Philippine Congress to enact a bill syndicate uses as an information network increasing the penalty on persons convicted for European pedophiles looking for cheap of smuggling illegal and undesirable aliens sex in Asia. It is for this reason that

175 RESOURCE MATERIAL SERIES No. 54 concerned government agencies have affected the relationship among police joined hands to arrest the worsening forces in the region. The introduction and situation. The Bureau of Immigration, for creation of internet and electronic mail (e- example, has revived its crusade against mail) in the computer realm has brought probable foreign prostitutes. members of foreign nations closer to each other. Communication is now at the touch VI. ILLICIT TRAFFICKING OF of a finger. However, this has also led to MOTOR VEHICLES sophistication and a rise in commercial crimes. Syndicates, who have knowledge Most of the apprehension in the country and skill about computers, known to be of illegally transported motor vehicles “computer hackers”, can access bank involves luxury vehicles from the US, transactions, imitate certain products and Japan and Hong Kong. These vehicles, perfectly forge signatures through the use which are actually luxury vehicles, are of computers. entered through the ports but are declared as utility vehicles to avoid payment of ad Recently, the Philippines scored a valorem tax. Some other luxury vehicles significant breakthrough in credit card entered through the ports are simply fraud through the arrest of five (5) undeclared or misclassified. Other vehicles suspected members involved in the are disassembled and declared as parts, manufacture and worldwide sale and availing lower tariff duties, and then are distribution of falsified payment cards, last assembled after release from the customs 29 November 1997. The arrest resulted area. They are commonly known in the from simultaneous raids conducted by the Philippines as “chop-chop”. PNP Intelligence Group in cooperation with the US Secret Service and Interpol. Practically, the bulk of smuggled motor Arrested during the operations were the vehicles apprehended are motorbikes following suspects who claimed/identified landed outside of customs entry points. themselves to be: They are unloaded shipside, often in international waters, into local small boats (a) Raymond JACKSON a.ka. and landed at the shorelines. Most of these ALLEN MILLER landings occur in Northwest Luzon, (b) Peter HORNE and Northern Midanao. (c) Otto URBAN (d) Helen HORNE VII. MONEY LAUNDERING (e) Jaime BUETA Money laundering is another type of commercial crime. It is defined as a process Another suspect, a certain Horst SELIG, of making or turning bad money/funds who was identified as being the raised and earned through crime (for mastermind of the syndicate, was able to example drug money), into good. The elude arrest. Reportedly, SELIG is wanted Phillipines has no money laundering laws by the police authorities in Germany. that will guide law enforcers in preventing this crime. INTERPOL and the US Secret Service disclosed that this syndicate has VIII. TRANSNATIONAL ECONOMIC successfully operated and eluded arrest in CRIMES the US, United Kingdom and other parts of Europe, Hong Kong and Thailand. It is Technological advancement has greatly believed that they transferred their base

176 108TH INTERNATIONAL SEMINAR PARTICIPANTS’ PAPERS of operation to the Philippines because of courier companies to deliver the cards. In the absence of a specific law dealing with this method, the syndicates bribe couriers fraudulent payment cards. Apparently, to lend them the card in transient, the data they also underestimated the ability of our of which is extracted. Once done, the law enforcement agencies. cloned/compromise card is returned to the courier for delivery, a courier is bribed an The initial investigation conducted average of P2,500-P5,000 per card. disclosed that the local payment card industry listed to this syndicate 3. Cardholder and Syndicates approximately USD$15 million as a result In this method, the cardholder themself of the flooding of counterfeit/cloned is approached by the syndicate for the payment cards manufactured by above- cloning of their card in exchange for a cited suspects. Payment cards issued by at certain amount. The syndicate can portray least fifty-two (52) local and international to the cardholder the advantages of having banks and credit companies have been their card cloned. cloned/falsified. These include American Express, Citibank, Bank Americard/ 4. Merchant-Syndicate Deutsche Bank, Equitable Bank, This method is done by bribing personnel MasterCard, VISA and others. Other firms with access to the account numbers of could have been similarly compromised. clients of a business establishment into The extent of the damage on the credit card revealing information about the account industry and concerned banking number of payment cards of said clients. institutions in particular, and the impact The syndicate then creates multiple clones on the national economy and on global out of each account number elicited from industry in general, can not be determined the business establishment. As a support until a thorough review and analysis of the to the payment card cloning schemes, fake software and documents seized from the identification cards such as passports, syndicate have been made. driver’s licenses and similar identification documents are manufactured. These are The syndicate employs the following four usually presented as issued by (4) basic modus operandi: international banking institutions.

1. Skimming Method Given its enormous impact in the A member of the syndicate will go to a booming payment card industry in the business establishment and introduce country and business sector as a whole, the himself as a representative of a payment PNP appealed to Philippine legislators to card issuing bank. They will then ask to expedite the passage of law that will examine the skimming device. Once specifically address Payment Card Fraud. permitted, they attache the skimming device to their computer, which then grabs IX. ASSESSMENT and stores the data from the skimming Through the foregoing discussion, we device. The surreptitiously obtained data have come up with the following is then used to manufacture the cloned assessment: payment cards. i) Crime groups in the Philippines 2. Courier-Intercept Method are still loosely organized and Issuing banks, instead of directly structured. These groups are still releasing payment cards to clients, employ

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in their infancy stages compared X. RECOMMENDATIONS to their foreign counterparts who The following measures involving have systematically established international cooperation are suggested to broad social spectrums of effectively curb transnational crime influence essential to their groups: operation. ii) The illegal activities of crime i) Strengthening of diplomatic groups in the country are largely relations, networking and domestic in implication and effect. vigorous exchange of information Except for firearms smuggling, and technology through prostitution and illegal drug INTERPOL, ASEANAPOL and trafficking, all other crime other concerned international activities in the Philippines has no bodies. The establishment of direct bearing or relationship to direct linkages with other other nations. INTERPOL member countries iii) As the Philippines progresses should be pursued to expeditiously economically with its Medium facilitate intelligence exchange Term Development and enable immediate action on Plan(MTDP),it is expected that all cases, particularly the transnational crimes sponsored by activities of transnational crime international crime groups will syndicates. This could further be proliferate in the country. This will enhanced through the mutual further be hastened by the sharing of technology, either by displacement of Hong Kong based exchanging training or by other syndicates after its return to means. China in 1997. iv) The Philippines needs to enact ii) Forging extradition treaties Anti-Racketeering and Anti- among concerned nations. Money Laundering statutes to Extradition treaties with the other cope with organized crime. These countries are of utmost necessity statutes will no doubt arm our law in suppressing international enforcement agencies with syndicates and containing the effective measures to deny upsurge of transnational crimes. organized crime their substantial This is particularly true when economic base of support. offenders escape from their v) With the existence of the country and seek sanctuary in extradition treaty between the another, thereby evading the full Philippines and the United States, force of the law. We need to re- neutralization of crime groups negotiate existing extradition seeking sanctuary in both treaties that are hampered by countries will be accelerated. The technicalities in enforcement. Philippines needs also to expand and negotiate with other countries iv) Conduct of joint and coordinated on the forging of extradition patrols on common borders as a treaties and re-negotiation of cooperative effort in thwarting existing treaties that are organized crime. hampered by technicalities in enforcement.

178 108TH INTERNATIONAL SEMINAR PARTICIPANTS’ PAPERS

TABLE 1 RESULT OF ANTI-NARCOTICS OPERATIONS CONDUCTED

1995 and 1996 statistical data of arrest and confiscation for dangerous drugs

1996 ARREST 1995 (January to December) No. of Persons Arrested 1,425 1,311 No. of Foreigners Arrested 15 (2 killed) 27 (1 killed) CONFISCATIONS/SEIZURES Heroin 0 1,534gms Cocaine 14,424gms 1,392gms Methamphetamine(Shabu) 207,593gms 280,699.24gms Marijuana Leaves 1,754,956gms 964,062.10gms Marijuana Plants 6,808,473pcs 9,164,052pcs Marijuana Seedlings 22,847,193pcs 2,997,065pcs TOTAL MARKET VALUE P1.76 BILLION P2.044 BILLION

TABLE 2 GOVERNMENT COUNTERMEASURES

Kinds of Drugs Quantity Morphine, Heroin, Cocaine 40 grams or more Shabu (Methamphetamine) 200 grams or more Marijuana(Cannabis) 750 grams or more Marijuana resin or MJ hashish 50 grams or more

TABLE 3 RESULTS OF PHILIPPINE NATIONAL POLICE OPERATIONS (1993 to 30 SEPT 1997)

1992 1993 1994 1995 1996 1997 TOTAL No of Narcotics Operations 4965 5068 4763 6126 21677 18,632 61,231 Buy-Bust 1977 1844 1516 2355 6246 6439 20,377 Service of Warrants 2811 2980 3093 3602 15231 11,184 38901 Marijuana Eradication 177 244 454 169 200 352 1,296 No. of Arrested Persons 6030 6537 5358 7273 12040 11,325 48,590 No. of Cases Filed In Court 876 345 3558 4374 7505 7,287 23,954 No. of Syndicates Busted 59 20 69 58 65 24 295 Total Amount of Drugs Seized P1.198 P.828 P1.185 P2.089 P4.428 P1.283 P11.011

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TABLE 4 DISPOSITION OF DRUG CASES FROM 1993-SEPT 1997 (PNP NARCOTICS GROUP STATISTICS)

1993 1994 1995 1996 1997 Total No. of Narcotics Operations 945 875 1,425 1,000 668 4913 No. of Arrested Persons 1,211 1,006 10,563 1,311 1103 6194 No. of Cases Filed in Court 345 948 854 941 736 3824 No. of Convicted Persons 156 131 50 30 16 383 No. of Cases Dismissed 137 48 6 2 1 197 No. of Pending Cases 52 769 795 909 719 3244

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