It is precisely the substantial financial power of transnational criminal groups that makes them more and more menacing. Although statistics on the secondary income of OCG remain secret, the United Nations Office on Drugs and Crime (UNODC) believes that these revenues stand at $2.1 trillion, not subject to taxation. This means that 3.6% of global GDP has very “shady” sources, mainly originating from smuggling activities, illegal production and trafficking of drugs, transportation of illegal migrants, racketeering, human and arms trafficking, circulation of counterfeit goods, etc.
A significant portion of the illegal funds obtained by OCG is reinvested into respectable securities markets, and as a result an increasing proportion of the public debt of many countries is now partially kept within criminal organizations in the form of public and treasury obligations. Some of these countries due to the fault of creditors are directly dependent on criminal groups.
In addition, these criminal groups exercise significant influence on the macroeconomic policies of different governments. Tax havens in offshore zones make possible the laundering of a considerable part of the immense incomes of OCG. Using this mechanism, many micro-states have found a way to subsidize their economies, without which they would not have survived, as their legal resources are limited. Some countries are already dependent on OCG: Kosovo, Montenegro, Guinea Bissau, and several others. Many states may fall under the influence of organized crime in the near future, such as Guinea, Mozambique, certain Balkan countries, Mexico and the Central American region.
When OCG infiltrate state structures, the consequences are the most dramatic, since they get access to official legalized documents, the banking sector, diplomatic missions and by using these elements they gain more understanding in matters of transportation of criminal goods and extraterritoriality.
Moreover, as soon as a particular organized crime group manages to infiltrate a legitimate economy, it is very difficult to detect it and the group becomes almost ineradicable, since tough action against the OCG may automatically result in the destruction of the economic structure. A prime example in this case is the French Côte d’Azur: the tough fight against OCG (mainly Italian, Russian and Corsican) in this region could lead to the disappearance of thousands of jobs in various fields such as tourism and catering, real estate, recreation and so on. That is the problem facing the French law enforcement agencies in their fight against OCG.
In order to secretly find their way into the legitimate economy, OCG targets are investment banks, legal, brokerage and transportation companies that are both involved in the inspection of OCG and their legal coverage. OCG also invest their assets into stock exchange activity, into speculation activities in raw material and food production markets, using various dummy companies.
What was formerly considered as the shadow economy, unfortunately, now in many countries has become an official commercial activity, often dependent on organized crime. For example, hand-made fakes of the 1990s have now reached the industrial level, directly endangering the existence of some small and medium-sized enterprises in the West, which are less protected than large companies. Due to the progressive decline of the average purchasing power of consumers in the West (a direct result of the economic crisis), large companies do not hesitate to buy more low-cost products, the origin of which is sometimes in question. This is done not only to the detriment of national industries, but sometimes this endangers the lives of people. The matter is not as serious in the case of counterfeit watches or luxury clothes, but it is an entirely different matter when it comes to children’s toys or important parts for vehicles, counterfeit medication or spare parts for aircraft. Of course, airplanes providing international flights are regularly monitored, but the situation is completely different with domestic flights, especially those in developing countries. A series of disasters involving Iranian civil and military aircraft is a clear example. Over the last ten years in Iran around fifteen air collisions have claimed the lives of more than 900 people. According to experts, this is largely caused by the fact that Iran, which is under international sanctions, is forced to buy aircraft spare parts from China, which often offers counterfeit dubious products.
Furthermore, OCG are fully utilizing globalization and the recent economic crisis, injecting illegally earned money into companies that can no longer take out loans from financial institutions experiencing difficulties. In the long run, these “sponsors” of organized crime as a way of debt settlement buy out many respectable firms and this reinforces and legitimizes OCG in society.
Before 1990, criminal organizations were usually located in the countries of their national activities, with the exception of the Italian Mafia, which has already spread into Western Europe and the US. However, after the democratic changes that took place at that time in several European countries, organized crime groups spread all over the world, sometimes engaging in armed conflict with local crime units in other states, however, more often than not, they entered into alliance with their foreign counterparts. They have created a sort of global “Common Market” of organized crime. Lack of resources and expertise from law enforcement agencies in many countries have contributed to the growth of OCG.
The success of organized crime has also been fueled by large sums of money, which have been given as bribes to politicians, employees and other individuals who could be of use to OCG. Corruption, coupled with the threat “plata o plomo (a bribe or a bullet) is a sort of “disharmonized cocktail” which has permitted OCG to get rid of many obstacles on their way to power. In a world where salaries are often very low (the lower the salary, the easier it is for corruption to spread) and where the authorities intervene only after a crime has been committed (threats are always more effective when people are left without the prospect of possible protection), this method has indeed become compelling.
However, many experts agree that perhaps the most important reason for the strengthening of organized crime in many countries is the fact that after the September 11 terrorist attacks, the main efforts and measures by most states were directed at the fight against terrorism (Global War On Terrorism/GWOT) at the expense of the fight against OCG. This resulted in the reduction of organized crime squads, their funding and size. An illustrative example is the US Federal Bureau of Investigation (FBI), which in compliance with the political order of the time, placed the fight against organized crime lower on its agenda. Hundreds of American federal agents left organized crime squads and entered into units for combating terrorism. This was immediately taken advantage of by OCG.
The fight against organized crime is very complex and includes three inevitable steps: thorough proactive monitoring of OCG activities; the engagement of policy-making authorities and specialized agencies and improving the penal system.
Clearly, it is extremely difficult to carry out the search for information, infiltration and selection of sources inside mafia groups. OCG members are often limited to the family circle; everyone knows everything about each other. New arrivals always fall under suspicion and they are often immediately rejected. However, this issue can be solved the Italian way – when law enforcement agencies work with those who have confessed. However, in this case there must be a reliable system of witness protection, since the safety of the witnesses and their close relative is seriously threatened.
There is another solution, which could be very helpful in organizing the fight against OCG. Using the interests of the crime groups in external structures for the successful conduct of activities: law firms, financial, tax and transportation companies, notaries, etc. In this connection, there is always the possibility to gain access to OCG through them. It is also possible to deliberately create such institutions, which could lure criminals and then information could be gathered and used in the fight against OCG.
On the issue of using such services French experts in particular have drawn attention to the possibility of successful utilizing nongovernmental organizations such as “Anti-Mafia” in the fight against OCG. Such NGOs have proven to be successful in Italy, but they are not used in other European countries, despite the efforts of several volunteers. The media can also play a decisive role in the crackdown on organized crime, especially as they continue to carry out independent investigations.
Finally, punishment should focus on the most sensitive element to criminals: money. To do this, experts say, national legislation must provide for the complete confiscation of ill-gotten funds along with the appropriate additional penalties. Although it is possible to doubt the real effectiveness of seizures carried out by the Italian justice system, which is quite widely used as a solution. Indeed, the amounts seized averaged 729 million Euros per year, while a rough estimate of the criminals’ capital turnover varies between 130 and 180 billion Euros. For this reason it cannot be ruled out that the criminals are placing these losses into the section “lost profits” or they might be paying out very generous sums to corrupt police officers and representatives of the justice system in Italy.
Yet the confiscation of “property” should be accompanied by prosecution procedures and the exposure of those responsible for the committed crimes. For these purposes, the international police and judicial cooperation should by all means be strengthened.
On top of all that, according to European experts, this problem needs to be dealt with more effectively by isolating convicted OCG members in order to exclude the possibility of them pursuing their criminal activities from prison, as is often the case in many countries.
Vladimir Platov, Middle East expert, exclusively for theonline magazine “New Eastern Outlook”.
