Week 3 Transnational Crime PDF

Week 3: Transnational Crime What is Transnational Crime? 2  What is Transnational Crime? Impact on the global economy – At least 52 categories of crime – Accounts for 3.6% of global GDP ($2.1 trillion) – b/t 12 and 27 million represent TOC...

Week 3: Transnational Crime What is Transnational Crime? 2  What is Transnational Crime? Impact on the global economy – At least 52 categories of crime – Accounts for 3.6% of global GDP ($2.1 trillion) – b/t 12 and 27 million represent TOC forced labor pool – Socio-economic cost surpasses illicit revenue stream by a ratio of 2:1 Takes a toll on legitimate business by diverting income, it also displaces legitimate commerce when reinvesting by ruining efficiencies and credibility of institutions, local and national economies UNODC (2011) 3 Definitions United Nations Convention on Transnational Organized Crime (UNTOC) 4  Definitions United Nations Convention on Transnational Organized Crime (UNTOC) Accurate statistics on TOC are rare and often politicized: - Inflated data can be driven by official agencies seeking to draw attention to their mission and influence budgeting decisions - Suppressed data may result from agencies and private sector organizations wishing to conceal vulnerabilities to avoid law suits and higher insurance, to protect stock values and careers Jurisdictional arbitrage: - Using legal discrepancies between jurisdictions or states in order to have advantage over government law enforcement agencies - Allows TOC to elude prosecution and interdiction by defying sovereign and jurisdictional boundaries 5  Structure of Transnational Crime The single, pyramid-based structure of traditional organized crime has morphed into a less crystalline configuration of fluid networks and functional cooperation Organized crime is far more than a crime - it is a social phenomenon, a network of relationships based on reciprocal benefit that extends to the heart of society, and of institutional and economic life Jamieson (2001) More accurate to regard transnational organized crime as a range of actors responding to market forces UN Office on Drugs and Crime (2010) 6 Transnational Crimes: Who, How & What 7 Transnational Crimes: Who, How & What 8 Transnational Crimes: Who, How & What 9 Types of Transnational Crimes 10 Factors influencing Transnational Crime 11  Operating Techniques Although international criminals and terrorists have different motives, both types of transnational criminals use similar methods to execute their crimes. Violence is a central tool of their criminal arsenal, providing internal control and a highly visible external weapon. Both groups use many less visible techniques Internet, satellite phones, and cell phones – finding them essential to maintaining their organizations and committing their crimes. Money laundering and corruption – collusion remain important tools for transnational criminals, a more striking confluence is found in the ways that both engage in organized criminal activities to further their ends. 12  Difference between Transnational Crime & Terrorism TOC is politically conservative, in order to preserve a system from which they can profit. Terrorists seek the overthrow or destruction of the system TOC opposes the state as a rival for power and wealth, while terrorists oppose the state to seek its overthrow TOC has long term time horizons whereas terrorists do not TOC seeks wealth accumulation, while terrorists seek wealth distribution TOC prefers anonymity, while terrorists openly assume responsibility for their crimes TOC relies on criminal activity for financial support, while terrorists rely on criminal activity plus state sponsorship, and individual donations for their financial support 13  Similarities between Transnational Crime & Terrorism Both benefit from frail economic and political conditions Both recruit and exploit similar subpopulations Both use diaspora and ethnic communities for cover and exploitation Both have made their organizational structures more horizontal and less pyramid-based due to the pressures of globalization 14  Transnational Crime: Terrorist Networks Idea that criminal and terrorist groups are on a continuum from separate actors to joint Black hole Syndrome is when both groups essentially merge 15  Transnational Crime: Terrorist Networks Interactions between international criminal & terrorist to commit crime or terrorism for their mutual benefit: – Drug and human trafficking – Exploiting underground market in consumer goods, arms, pirated software – Assassination and murder for hire Example of crime-terrorist interactions: – Grey wolves of Turkey & Kurdish Workers Party – Hezbollah & Chinese criminal gangs – Chechen separatists & east European criminal gangs – National Liberation Party of Colombia & the Medellin drug cartel 16  Transnational Crime: Terrorist Networks On the subject of the nexus between crime, terrorism, & official corruption: “…for the investigator or analyst seeking examples for the perfect conditions for such cooperation, the tri-border area is an obvious choice” Research Division of the Library of congress (2005) Between 20,000 and 60,000 ethnic Arabs live in the region. Known Middle East Terrorist groups active in the TBA include: Hamas Hezbollah Al Qaeda Al Gama’a Islamiyya *TEVUS 17  Transnational Crime & Globalization Taking advantage of corruptible states, frail legal and security infrastructures Exploiting subpopulations as markets and labor pools Forming alliances and joint ventures with local criminal groups Having to ability to move assets, associates, and sympathizers Market deregulation and privatization programs have opened up “more spaces for illegal activity including those that include financial and capital instruments” 18  Transnational Crime & Globalization TOC “does not confine its crimes to familiar crimes as narcotics, murder, extortion, etc. They also impute “taxes” for security, regional safe havens, and the use of trafficking routes TOC collects licensing fees from associate groups and enter into partnerships in order to compete in vertical markets TOC also understands the value of “goodwill” and good corporate citizenship. Many crime groups have been noted for: Establishing charities Maintaining schools and hospitals Providing public services 19  Transnational Crime: Filling the void of the state Offering relief from poverty Hope of upward mobility Alternative codes of justice Alternative collective identity Alternative “monopoly of violence” (protection) 20  Transnational Crime: Filling the void of the state Wars create ‘law and order’ vacuum which criminals fill: Sometimes black market economy is the only way to get basic goods during wars… But goods traffickers have a vested interest in the conflict not ending--they may become actors in the conflict! Other side of the coin: Parties in civil wars fund their activities through criminal activities – export and import… Trans-border involvement to destabilize neighbors and exploit their resources illegally (conflict diamonds in Sierra Leone) 21  Transnational Crime: Drug Trade Illicit narcotics trade has been a reliable source of income. Heroin & cocaine revenues from the plains of Central Asia and the jungles of South America amount to over $150 billion per year Opiates Central Asia – Between 12.8m and 20.2m users of opium & heroin globally – 6,883t of opium flows into the world market, 560t of which is converted into heroin – 80% of the population in some areas of Central Asia work in drug trafficking operations – Russian army is believed to be a major accomplice in the transport of illegal drugs 22  Transnational Crime: Drug Trade Cocaine South America – between 16m and 17m users of cocaine globally – Total production equals 470t per year – Total market equals b/t $85b and $88b per year – Colombian syndrome is the fusion of crime and politics and is driven by cocaine trade 23  Transnational Crime: Mafias ‘Export’ of illegal activities through immigrant links (e. g. Sicilian mafia in the US) Activities expanding to cross-border illegal trade, use of open frontiers Case Study: Russian Organised Crime Rampant growth since 1991 – economic liberalism has created a new class of ‘entrepreneurs’ Racketeering Corruption Intimidation of businesses and public officials Money laundering Extra-judicial killings/assassinations Seen throughout Central and Eastern Europe as well as US (Brighton Beach) Involved in prostitution and people trafficking rings in Western Europe (along with Eastern European gangs) 24  Transnational Crime: Mafias A Long History These enterprises evolved over the course of 3,000 years during numerous periods of invasion and exploitation by numerous conquering armies in Italy. Over the millennia, Sicilians became more clannish and began to rely on familial ties for safety, protection, justice, and survival. An underground secret society formed initially as resistance fighters against the invaders and to exact frontier vigilante justice against oppression. 25 Transnational Crime: Mafias In Sicily, the word Mafia tends to mean “manly.” A member was known as a “man of honor,” respected and admired because he protected his family and friends and kept silent even unto death. Sicilians weren’t concerned if the group profited from its actions because it came at the expense of the oppressive authorities. These secret societies eventually grew into the Sicilian Mafia, and changed from a group of honorable Sicilian men to an organized criminal group in the 1920s. 26  Transnational Crime: Mafias Italian Organized Crime/Mafia Since their appearance in the 1800s, Italian organized crime groups, broadly known as the Italian Mafia, have infiltrated the social and economic fabric of Italy and have become transnational in nature. Within Italy, there are four active groups: Cosa Nostra (Sicilian Mafia), Camorra, ’Ndrangheta, and Sacra Corona Unita. They are also known to collaborate with other international organized crime groups from all over the world to carry out their criminal activities. 27  Transnational Crime: Mafias LCN evolved from the Sicilian Mafia and is one of the foremost organized criminal threats to American society. Translated into English it means “this thing of ours.” It is a nationwide alliance of criminals— linked by blood ties or through conspiracy —dedicated to pursuing crime and protecting its members. It also is called the Mafia, a term used to describe other organized crime groups. 28  Transnational Crime: Mafias Their largest presence centers around New York, southern New Jersey, and Philadelphia. The major threats to American society posed by these groups are drug trafficking—heroin, in particular—and money laundering. They also are involved in illegal gambling, political corruption, extortion, kidnapping, fraud, counterfeiting, murders, bombings, weapons trafficking, and the infiltration of legitimate businesses. 29  Transnational Crime: Mafias The LCN, as it is known by the FBI, consists of different “families” or groups that are generally arranged geographically and engaged in significant and organized racketeering activity. It is involved in a broad spectrum of illegal activities: murder, extortion, drug trafficking, corruption of public officials, gambling, infiltration of legitimate businesses, labor racketeering, loan sharking, prostitution, pornography, tax-fraud schemes, and stock manipulation schemes. 30 Transnational Crime: Mafias The LCN is most active in the New York metropolitan area, parts of New Jersey, Philadelphia, Detroit, Chicago, and New England. The major LCN families include the five New York-based families— Bonanno, Colombo, Gambino, Genovese, and Luchese; the Newark-based DeCavalcante family; the New England LCN; the Philadelphia LCN; and the Chicago Outfit. They have members in other major cities and are involved in international crimes. Although the LCN has its roots in Italian organized crime, it has been a separate organization for many years. Today it cooperates in various criminal activities with different criminal groups that are headquartered in Italy. 31  Transnational Crime: Major theft crimes Major theft crimes may support terrorism-related funding and are directly related to organized crime groups, drug trafficking organizations, gang criminal enterprises, and illegal alien groups. Groups that commit major thefts also engage in other criminal acts, including violent crimes, fraud, money laundering, wire and mail fraud, intellectual property crime, and public corruption 32  Transnational Crime: Major theft crimes Art Theft: is the illicit trade in art and cultural artifacts includes theft of individual works of art, illegal export of objects protected by international laws, and pillaging of archaeological sites. The art and cultural property community estimates thefts to be about $500 million annually. It is an international problem requiring cooperation at all levels of law enforcement. Significant efforts are currently focused on ISIL looting and trafficking in cultural property to fund their terrorist agenda. 33  Transnational Crime: Major theft crimes Cargo theft: Widespread cargo theft has also given rise to concomitant offenses such as robbery, kidnapping, homicide, interstate transportation of stolen motor vehicles, drug trafficking, health care fraud, money laundering and insurance fraud. Cargo theft is identified as a high priority due to its adverse economic impact, negative impact on the retail supply chain, disruptive nature on the flow of commerce, and the potential for significant health and safety implications. Health and safety implications focus heavily on a concern for the theft of food and beverage consumables, health and beauty aids, and prescription and over-the-counter medicines and pharmaceuticals. 34  Transnational Crime: Major theft crimes Jewelry and Gem Theft: are often committed by organized criminal enterprises consisting of sophisticated thieves and organized fences for the stolen property. The jewelry and gem industry sustains estimated annual losses in excess of $1.5 billion. In some cases, these crimes resulted in serious physical injury or death. Jewelry and gem theft investigations can be extremely complex, national or international in scope, and require a specialized knowledge of the jewelry industry and how it operates. 35  Transnational Crime: Major theft crimes Organized Retail Theft: Industry experts estimate that organized retail crimes cost the U.S. approximately $30 billion each year. While that estimate includes other crimes like credit card fraud, gift card fraud, and price tag switching, other forms of theft may threaten consumer health and safety as stolen food products, pharmaceuticals, and other items are not maintained under proper conditions or labeled so may be less effective or hazardous when used by unsuspecting consumers. 36  Transnational Crime: Major theft crimes Vehicle theft: vehicle theft and its associated national and international criminal enterprises have been identified as having a strong nexus to threat financing where the vehicles are used as a medium or currency for worldwide financial transactions relating to drug trafficking, money laundering, terrorism, and RICO violations. 37  Money Laundering The movement of illicit funds for the purpose of concealing the true source, ownership or use of the funds Monetary proceeds derived from criminal activity are transformed into funds with an legal source Money laundering provides the fuel for drug dealers, terrorists, arms dealers and other criminals to operate and expand their enterprises. 38  The Role of Failed States Areas without adequate economic infrastructure or resources to fulfill needs of their citizens For TOC these places represent exploitable consumer markets and labor pools Provide safe havens from interdiction and useful for jurisdictional arbitrage At the crossroads of current mass migration trend 39 Countering Transnational Organized Crime 40 Countering Transnational Organized Crime 41 Countering Transnational Organized Crime 42 Countering Transnational Organized Crime: US example 43  Anti-Crime Methods & Efforts Money Laundering Financial Action Trade Force (FATF), founded by the G7 in 1989 it: sets global banking standards promotes regulatory codes and transparency laws synchronizes anti-laundering laws facilitates investigations and extraditions Maritime Security US Naval Forces Africa (NAVAF) US Africa Command (AFRICOM) US Navy’s 7th Fleet NATO’s Operation Ocean Shield European Union’s Operation ATLANTA 44  Anti-Crime Methods & Efforts Cyber Security US Computer Emergency Response Team- (US-CERT) maintains relationships for information sharing and coordination purposes with: Critical infrastructure owners and operators Academia Federal and state agencies Domestic and international organizations DHS Information and Analysis Centers (ISAC) 45 Key points to remember 46 Any Questions? 47 Important Videos 48 Important Videos 49 Important Videos 50