Organized Crime: a Major Threat to State Security by Walter Kegö

Policy Brief No. 19, February 19, 2010 Organized Crime: A Major Threat to State Security by Walter Kegö According to United Nations Office on Drugs and Crime (UNODC) transnational organized crime is one of the major threats to human security, impeding the social, economic, political and cultural development of societies worldwide. It is a multi-faceted phenomenon and has manifested itself in different activities, among others, drug trafficking, trafficking in human beings; trafficking in firearms; smuggling of migrants; money laundering; etc. In particular drug trafficking is one of the main activities of organized crime groups, generating enormous profits. UNODC works closely with Governments, international organizations and civil society to strengthen cooperation to counter the pervasive influence of organized crime and drug trafficking. p until the mid-1980s organized crime was consid- The problem of transnational organized crime is a U ered a problem that concerned only a limited num- serious one that demands attentive investigation and ber of countries – primarily the United States Italy, China, greater availability of resources, in comparison to what Colombia and possibly even Japan. Up until then, re- has been allocated to it before. It is clear that the Chinese searchers, the political leaderships and the general public, triads, Russian criminal organizations, Colombian cartels, in nearly all European countries, aside from Italy, re- Japanese Yakuza, Sicilian Mafia (as well as other Italian garded themselves as largely unaffected by organized groups, such as the Neapolitan Camorra, 'Ndrangheta, crime. Twenty years later, the European landscape has and Sacra Corona Unita), Nigerian criminal organizations, changed dramatically. Today, virtually all European na- and Turkish drug-trafficking groups engage in extensive tional law enforcement agencies admit that they have seri- criminal activities on a regional and, often, global basis. ous problems with organized crime. The fight against organized crime represents a priority of Europol and most Origins of the threat domestic law enforcement agencies. There is concern The threat to national security became increasingly tangi- about the threats posed by organized crime in media and ble with the collapse of Communism and the end of the the public, not only in Europe, but also worldwide. Cold War. Since then, the planet has become a global vil- Experts usually agree that criminal organizations typi- lage for transnational criminals. By facilitating the move- cally share a number of common features: they operate ment of people, goods, capital and services, globalization with some permanence as a structured group, commit has promoted economic growth especially in Asia and, serious crimes for the sake of profit, use extreme violence later on, in Latin America. On the negative side, globaliza- and corruption as part of their modus operandi, and laun- tion has also helped to spread insecurity, organized crime der the proceeds of criminal activities into the legal econ- and violence. omy. Encumbered in many ways, law enforcement agencies We are familiar with the origins of the problem. Ini- have not been as quick to adapt to this new situation and tially, we called it mafia. Elsewhere in Europe, North criminals are well aware of this fact. Transnational crimi- America and the Far East the names were cartels, mob- nal organizations exploit the inherent difficulties of inter- sters, syndicates, yakuza, triads etc. This was the time national law enforcement agencies, in order to conduct when criminal groups were domestic in size and culture their illegal activities and hide their illicit proceeds in ways and with limited cross-border ties. A quarter of a century that minimize the risk that they will be arrested or prose- later, the threat looms larger, is more serious and, also, is cuted, or have their assets forfeited. more widely spread, geographically speaking. 1 Criminals have posed a threat to people and property The Economics of Global Organized Crime since time immemorial. For centuries, the concern was more about conventional crime, namely offences against Transnational criminality has more recently diversified individuals and assets in the form of murder, fraud and into money-laundering, identity-theft, cyber-crime, human theft. Today, the nature of crime has changed. It has be- trafficking and exploitation of natural resources. We can- come more organized and transnational and it has reached not assess the dimensions of this global business, though macro-economic dimensions. But it has also turned into a we can guess that, in size and impact, it dwarfs any legiti- global business operating in collusion with legitimate ac- mate trade. tivities. Estimates of the total value of organized crime vary The present trend is that criminal groups specialise in widely. Havocscope, an online database of black market providing particular services, such as drug importation, activities, estimates world illicit trade to be almost $730 drug concealment, fraudulent documentation, money billion per year, with counterfeiting and piracy to be $300 laundering, street enforcement, and for networks of crimi- billion – $1 trillion, trade in environmental goods $69 bil- nals to set up operations using a convergence of these lion and weapons trade $10 billion. The illicit drug trade is skills. A criminal enterprise today is highly efficient in believed to be valued at between $500 and $900 billion terms of expertise and manpower. The tendency to use worldwide. Analysts identify cocaine and heroin traffick- one network for one job, and then organize another net- ing as the most profitable criminal activity for transna- work for another job, makes the role of law enforcement tional groups. Trafficking in persons for sexual exploita- agencies, in tackling these groups, much more trans- tion or forced labor is one of organized crime’s largest jurisdictional, and therefore much more difficult. revenue sources, generating $9.5 billion annually, accord- From the point of view of criminals, it is not the com- ing to the FBI. modity trafficked or the service provided which counts – McAfee, an IT security company estimates that theft whether that be heroin, amphetamines, firearms, human and breaches from cybercrime may have cost businesses smuggling, sex trafficking, piracy, intellectual property as much as $1 trillion in 2008. These figures do not in- crimes, credit card fraud, identity fraud or trafficking in clude extortion or organized crime’s part of the $1 trillion weapons of mass destruction – it is the capacity to under- in bribes that the World Bank estimates is paid annually or take these activities at the lowest risk of detection whilst its part of the estimated $1.5–6.5 trillion in laundered generating the highest profit, that motivates them. money. Supporting these criminal networks is a range of pro- It is indeed bad when international mafias recycle dirty fessionals operating along the margins of criminality, but money into the economy, undermining the health of pro- without whom transnational crime would not succeed. ductive systems. It is even worse when they buy elections, They include lawyers, accountants, financial advisers, the military, even presidents - in other words, when they bankers, stockbrokers, IT specialists, businessmen, chem- buy power. Worst of all is when they forge links with in- ists, corrupt politicians, judges and magistrates, govern- ternational terrorism and rogue powers. This turns them ment officials, police, customs officers and military per- into a security threat to cities, sovereign states and even sonnel; and even compliant media people and clerics. In- entire regions. The threat is so serious that the UN Secu- creasingly, criminal profits are not used for the lavish life- rity Council has considered its implications in several styles of the criminals involved, but for investment in le- theaters. The threat is so real that around the world, the gitimate business, property and shares. At the end of the fear of organized crime has changed strategic doctrines day, quite a significant part of the criminal profits gener- and threat assessments. In short, the warning signs are ated by criminal enterprises may have been generated everywhere and this is indeed a threat to us all. from legitimate business activities, using funds derived The international economic threat posed by transna- from illegitimate or criminal activities. tional organized crime in an increasingly global economy is among the new threats to national security. The major economic powers and the less developed nations did not previously share a collective problem of this nature. The 2 transnational criminal networks do not just affect a se- society. These mafia organizations evolved in the second lected group of financial institutions or regional areas. half of the eighteenth century, when prominent local They affect international financial networks and econo- families, through their patronage and support of local mies at national and regional levels. These new threats will communities, became responsible for, and took control also present new conflicts that will require innovative of, towns and regions. To maintain their power base these strategies in the future, since we today have global coop- families engaged in violence and extortion and over time eration among transnational criminal groups. have increasingly become involved in profitable illegal Transnational criminal groups presently pose

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