Legal Responses to Global Crime Threats Law School University of Roma Tre April – May 2018 TRANSNATIONAL ORGANIZED CRIME Ambassador Dr Uglješa Ugi Zvekić

GLOBAL ORGANIZED CRIME & CORRUPTION SDG 2030: retarding economic and human development (Goal 16) Inverse correlation between competitiveness and corruption (free market) Undermining democracy: weak institutions and no trust in institutions (de-based politics) Decreasing equal opportunity (socio-economic and political credo) Undermining moral virtues of integrity and work

Extent Impact Organized crime and corruption are not new but scale and scope have changed New forms and methods of legitimization Shifts in major illicit markets Expansion of new criminal markets and demand for new commodities Blurring of traditional producer, consumer and transit state typologies

Transnational Criminal Flows Suppliers of criminal flows: not anymore mostly from developing world and countries in transition Receivers: not only North America and West/Central Europe; Asia BUT Geopolitical equilibration of suppliers and receivers of illicit capital flows, money laundering, corruption, organized crime

ORGANIZED CORRUPTION Organized Crime and Corruption are profit-driven Organized Crime, Corruption and Money Laundering are increasingly interlinked While control over territory, goods and services is of utmost importance TRADING IN INFLUENCE par excellence ORGANIZED CORRUPTION

Geography of Transnational Criminal Flows Latin America to North America; West/Central Europe;West Africa Asia (Afghanistan) to West/Central Europe; Central Asia/RF North Africa to West Europe;South/Central Africa to SouthEast Asia/China/Japan Eastern Europe to West Europe;South/Central Africa West Europe to Eastern Europe/Afghanistan West Europe - within

Geopolitics of Transnational Criminal Flows Suppliers of criminal flows: mostly from developing world and countries in transition Receivers: North America and West/Central Europe; Asia But Europe/North America: Suppliers of illegal arms, precursors, illicit capital flows, money laundering, corruption, female trafficking victims

Geopolitics of Transnational Organized Crime Flows vs. Markets Disparity between the geography of criminal flows and criminal markets Criminal Flows: from developing to developed Criminal Markets : developed (but increasingly developing)

INTERNATIONAL LEGAL RESPONSES Drug Conventions United Nations Convention against Transnational Organized Crime – UNTOC (Palermo Convention) with Protocols (human trafficking; smuggling of migrants; firearms trafficking) United Nations Convention against Corruption – UNCAC (Merida Convention) EU; CoE; Regional conventions and protocols; OECD

United Nations Convention against Transnational Organized Crime (Palermo Convention) Adopted by GA Resolution 55/25 of 15 November 2000; open for signing & ratification at Palazzo di Giustizia (Palermo) Entered into force on 29 November 2003 Parties: 186

Criminal Markets for Persons Sexual exploitation: 79% Forced Labour: 18% Markets mostly located in North America/West Europe increasingly in Africa and Asia Increased labour exploitation in developed markets due to “making the labour closer to the capital” and demand for counterfeiting

Protocols supplementing UNTOC (1) The Protocol to Prevent, Supress and Punish Trafficking in Persons, especially Women and Children: in force as of 25 December 2003; Parties: 159; Serbia: Ratified The Protocol against Smuggling of Migrants by Land, Sea and Air: in force as of 28 January 2004; Parties: 138; Serbia: Ratified

Drugs: Flows Heroin: 90% from Afghanistan to Russia and Europe (via the Northern and the Balkan routes) Cocaine: vast bulk from the Andean region to North America and Europe (via Central America; West Africa) and Southern Cone of Latin America Cannabis: From Africa (Morocco) and Asia (Afghanistan) to Europe; from Central America to North America but increased domestic production; the challenges of legalization (Dutch; Uruquay; Colorado; Washington State) New Psychoactive Substances: worldwide production and trafficking

Drugs: Markets The largest world market is for cannabis: increased supply from foreign and domestic production – an increasing world market Cocaine: decline in the USA market but Europe becoming the largest world market; emerging cocaine market in Southern Cone of Latin America Heroin: increasing Russian market but stable European market NPS: the fastest growing production, trafficking and world market

International Drugs Conventions Single Convention on Narcotic Drugs of 1961 Parties: 184; Italy; Ratified Convention on Psychotropic Substances of 1971 Parties: 183; Italy: Ratified United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 Parties: 189; Italy: Ratified

Cigarette Smuggling One of the biggest and the oldest TOC business Out of estimated USD 16 billion global cigarette trade 25% is illict Traditional OC (e.g. Italian Mafia; the Balkan OC; Polish OC; Russian and CA OC; ) Non-European: Turkish OC; Arabian OC (North Africa/Middle East) Within EU: Dutch, Belgium, UK Hard-core “drug traffickers” but also migrants and elderly living from a social security allowances (informal economy) Big multinational companies (e.g. R.J.Reynolds in breach of the UN and the US embargo on Iraq): Puerto Rico – EU ports – Cyprus – Lebanon – Turkey - Iraq

Cigarette Smuggling: Why still there ? One of the oldest smuggling activities State control vs. unpaid duties and tax evasion (VAT) Cigarette smuggling flow: towards markets with the highest excise rate (UK; Ireland; France; Germany; Nordics) – the Northern trade belt Western Balkans considered one of the most dyamic areas for cigarette smuggling

Tobacco Convention WHO Framework Convention on Tobacco Control Adopted in 2003 Entered into force: 19 September 2013 Parties: 179; USA: signed 10 May 2009 Protocol to Eliminate Illicit Trade in Tobacco Products Signed by 56; Nicaragua ratified; USA: not signed

Italian Criminal Markets One of the oldest TOC Mafia but also Camorra and ‘Ndrangheta Today it is not the control of the territory but the market control Criminal market annual value: 170 billion EURO or 10% GDP Drug Trafficking: 7.7 b; Extorsion: 4.7 b; Prostitution 4.6; Counterfeiting 4.5 Construction; Special Litter Disposal; Restaurants; Hazard Games; Gold exchange

МEXICO 95% of cocaine comes from Mexico to the US with an annual value of 10 billion EURO The leader fo the biggest cartel “Sinaloa” – El Chapo was arrested twice and waiting for extradition to the US 5 main cartels: Sinaloa; Los Zetas; Cartel del Golfo; Cartel de Juarez; Cartel del Jalisco From 2006 some 70 000 victims of the inter- cartel conflict However, cannabis drug trafficking into USA reduced (legalization of marijuana in WA,CO,OR,AL)

East Asia East Asia, in particular China, will become the most prosperous criminal market both in terms of demand and supply: Drug trafficking, production, consumption; Human trafficking/smuggling of migrants Trafficking in human body parts Cyber crime Fraud and corruption Counterfeiting Wild life/ivory illicit import

Balkans (1) Origins of OC in the Balkans (profit and opportunity driven crime export and import) Boom during the 90s Yugoslav conflict and sanctions Connections among criminal networks, para- military, local leaders and sometimes security services; connections with ex-Yugoslav and foreign OC groups

Balkans (2) Drug trafficking but also cannabis and NPS production Cigarettes smuggling Extortion Smuggling of migrants/human trafficking Corruption Small arms trafficking Money laundering Counterfeited goods production and trafficking

AFRICA Arab countries (Lybia): smuggling of migrants and human trafficking; arms trafficking; drugs (kat) West Africa: cocain (from Latin America – Brazil) and cannabis to Europe; human trafficking; corruption Southern Africa: human trafficking; poaching; wild life trafficking (ivory; rhino horn; etc.); “blood diamonds”; illicit extractions

Geopolitical Configuration of Transnational Organized Criminal Flows and Markets (2) Increasing global trend of the TOC to gain (and maintain) licit position through merging legal and illegal flows and markets: the legalization of profit Ownership of enterprises or holding of executive/managerial positions : the control over the profit legalization process Investments in economic sectors (e.g. entertainment/hotels; construction; waste disposal;) difficult to control Links with political parties/trade unions Increased use of e-technology for criminal enterprise

Organized Corruption: Markets Increasingly becoming organized as it requires many actors to design, effect, launder and legalize/invest Less distinction between active and passive corruption Less distinction between public and private sector corruption Increase due to developmental disparities and investment opportunities

ORGANIZED CRIME STRATEGY Legitimization of the illicit activities, status and profits as the main strategy Increased organized corruption both as a mean and an end in itself Increased presence of OC in the management and political authority structures to influence and control the process of legalization and legitimization of illicit flows and gains Increased investments in formal economy and ownership of companies and shares

LEGITIMIZATION and LEGALIZATION Part of the criminal profit goes to 1. maintenance and reproduction costs of the organization (operational costs; management cost; personal expenses) 2. social legitimization and respect (members’ and community welfare; political affiliations) Instrumental legalization costs (money-laundering and corruption costs; political and economic favours) Investments: in bars, hotels, restaurants, wholesale, retail estate, transportation and companies/shares

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