Military Review

International drug business and dirty money laundering

16
International drug business and dirty money launderingSince 1 January 2014, Russia has taken the chair of the G8 (G8), an international club that brings together the governments of Great Britain, Germany, Italy, Canada, Russia, the USA, France and Japan. The G8 member countries account for 50% of world GDP, 35% of world exports and 38% of imports. The 40 G8 summit will take place on 4-5 on June 2014 in Sochi. Russia proposed an agenda for the summit, in which the struggle against the international drug business is in the first place.


The laundering of dirty money is the basis of the drug trade union and banks.

The subject of the drug business is extremely extensive. Organized criminal groups involved in this business, as a rule, solve four main tasks:

a) ensuring the production, processing of drugs and bringing them to the wholesale distribution network;

b) organizing the sale of drugs through the wholesale and retail chains, bringing them to the final consumers and getting cash for the goods;

c) legalization of cash received, that is, their laundering by pumping into the banking system and becoming non-cash money;

d) the placement of money from bank accounts in various sectors of the legal economy, the completion of the "bleaching" of dirty money.

The activity of the drug business involves its close interaction with banks that take dirty money. Sometimes the drug mafia uses banks "in the dark", but this is usually for small amounts of cash injected into the banking system. With significant amounts and regular operations, the drug mafia directly negotiates with the bankers for long-term cooperation. During the last financial crisis, a unique picture was observed: the banks themselves began to search for exits to the drug mafia, to fight for attracting dirty money as a means of salvation from bankruptcy ...

The concepts of "dirty money" and "laundering"

The term money laundering was first used in the 80s. The twentieth century in the United States in relation to the income from the drug business and refers to the conversion of illegally obtained money into legal money. Many definitions of this concept have been proposed. The US Presidential Commission on Organized Crime in 1984 used the following wording: “Money laundering is the process by which existence, illicit origin or illegal use of income is hidden and then these revenues are disguised to appear to have a legal origin.”

In international law, a detailed definition of legalization (laundering) of proceeds from criminal activities and listing the types and methods of such legalization are contained in the UN Vienna Convention against Illicit Trafficking in Narcotic Drugs and Psychotropic Substances of December 19 1988, which had a great influence on the development of relevant legislation of Western countries . Vienna UN Convention 1988 recognized the laundering of money derived from drug trafficking as a crime, but the development of organized crime led to an increase in the income of criminal organizations obtained in other areas of criminal activity (slave trade, prostitution, trafficking in human organs, illegal trade weapons, extortion, secret placement of radioactive and other highly dangerous substances, etc.). Some of these revenues also began to be laundered and invested in the legal economy.

Council of Europe Convention No. 141 “On the laundering, detection, seizure and confiscation of the proceeds from criminal activity” of November 8 of 1990 recognized as a crime actions related to money laundering, derived not only from the drug business, but also from other types of criminal activity. Article 6 of the Convention defines the list of offenses related to money laundering. Differences in the legislation of individual countries are primarily associated with the definition of the list of acts that are the source of the legalized means. In the laws of some countries, the definition of dirty money includes all income, the receipt of which is accompanied by any violation of criminal law; in some, only income derived from serious criminal violations; in third countries, even income related to violations of civil and administrative law. In a number of countries, money received in the form of bribes (corruption) is also included in the category of dirty money.

Drug industry - the main supplier of dirty money in the banking sector

The most comprehensive picture of the income of organized crime in the world is contained in the report of the United Nations Office on Drugs and Crime (UNODC) published at the end of 2011, which is entitled “Evaluation of illegal financial flows generated by drug trafficking and other organized crime” (1).

The total turnover of all types of criminal activity in the world in 2009, according to the report, was close to 2,1 trillion. dollars, which is equivalent to 3,6% of global GDP. The report contains an even narrower estimate, which includes the income of transnational organized crime. The report includes the international trade in drugs, counterfeit goods, people, human organs, rare species of animals, fish, plants and trees, works of art and objects of cultural heritage, and light weapons. Revenues that, according to the authors of the report, are mainly related to illegal activities within individual states, remained outside the scope of a narrow assessment. These are proceeds from fraud, robbery, blackmail, theft, racketeering, etc. The turnover of transnational criminal operations amounted, according to the report, to approximately 875 billion dollars, or 1,5% of world GDP. Among the types of transnational criminal activity, drug trafficking ranks first: according to the report, it accounted for at least half of all revenues, i.e. in absolute terms, almost 450 billion dollars, or 0,75% of world GDP. The drug business really should be attributed to organized crime with a high degree of internationalization of operations: more than 90 percent of the total “product” is consumed outside the countries that produce it.

However, other assessments of drug trafficking are also found in publications on the world drug business. The most conservative estimates - 400 billion dollars, the highest - 1,5 trillion. The figure for drug business income contained in the UNODC report should be considered as very conservative. If the UN report says that the drug business accounts for about ½ of all the revenues of organized crime in the world, other sources have higher values ​​- 70% and even higher (2).

Table. 1.

Estimates of revenues from criminal activities in the United States, billions of dollars (3)

 

1990

1995

2000

2010

Income from drug trafficking

97

69

64

64

Income from other types of criminal activity *

112

137

160

236

Total income from criminal activities *

209

206

224

300

The share of drug business in total income from criminal activities,%

46

33

29

21

Total revenues from criminal activities to GDP,%

3,6

2,8

2,3

2,0

Revenues from drug trafficking to GDP,%

1,7

0,9

0,7

0,4


* Excluding income from tax offenses

The above table gives estimates of the proceeds from crime in general and the proceeds from the drug business in the United States. There, the share of the drug business in total criminal income is lower than in the whole world. There is even a tendency towards some relative decline in the income from the drug business. But this means that in other parts of the world, especially on the periphery of world capitalism, the rates of income from the drug business are higher than the world average. For example, in Afghanistan, which has now become the main supplier of drugs in the world, revenues from the production and export of drugs exceeded 50% of the country's GDP. According to conservative estimates, in the neighboring US Mexico, the drug business income is 2-3% of GDP.

No other single type of criminal activity even comes close to the drug business, either in absolute amounts of income or in terms of profitability (rate of return). For example, the annual income from underground trafficking in the world, according to the US Federal Bureau of Investigation (FBI), in the middle of the last decade amounted to 9 billion dollars. According to estimates of the World Wildlife Fund, the volume of illegal trade in wild species of animals and plants in the middle of the last decade was equal to 6 billion dollars, and the rate of profit in this business was in second place after the drug business and ranged from 500 to 1000 percent.

Dirty Money Trajectories

What is the fate of money derived from criminal activity? Part of the dirty money remains in the “black” economy in the form of expenses for paying wages of workers in its sphere, for paying for “goods” (the same drugs grown by peasants), for purchasing weapons, etc. Dirty money at the same time can flow from one sector of the "black" economy to another. For example, the proceeds from the drug business can be invested in illegal arms trafficking, prostitution, human trafficking, etc. However, most of the dirty money goes on washing, which can be carried out both in the country where the money was received and outside it. The aforementioned UNODC report states that more than ¾ dirty money received from all types of criminal activity and 2 / 3 dirty money received from transnational criminal activity were washed.

Table. 2.

Estimates of global criminal income and laundering, 2009 year (4)

 

Income from all types of criminal activity

Revenues from transboundary criminal activities

 

(1)

(2)

All revenues, trillion Doll.

2,1

0,9

Revenues relative to world GDP,%

3,6

1,5

Revenues past the "laundering" trillion. Doll.

1,6

0,6

"Laundered" income in relation to the world's GDP,%

2,7

1,0

"Laundered" income in relation to all income

3/4

2/3

Features of washing "cocaine" money

With regard to the level of washing dirty money derived from drug trafficking, in the literature there are estimates from 60 to 80 percent. In the UNODC report for income derived from the sale of cocaine, this figure was defined in 62%. It is noteworthy that the level of laundering of dirty money received by cocaine wholesalers was much higher than the level of washing in retail: 92 and 46 percent, respectively.

There is nothing surprising in this: the amount of incomes of wholesalers can be measured in the millions and tens of millions of dollars, such money must be invested somewhere, and for investing you need clean money. The income of individual participants in the retail trade is one or two orders of magnitude less. A significant part of such income goes to personal consumption (if it is not very large purchases), part of them returns to the “black” economy. Retailers generally do not take a substantial part of their money out of the "black" economy, dirty money there is in constant circulation ..

The UNODC report provides some estimates related to the world cocaine business. Digit analysis shows that:

1) the overwhelming majority of drug use is outside the countries producing these drugs;

2) the vast majority of all profits from this type of business is formed outside these countries;

3) a substantial part of the money received from the drug business is laundered not in the countries of drug use, but outside of them.

According to the report, in 2009, retail sales of this type of drug amounted to 85 billion, while the gross profit of traders (wholesale and retail) was equal to 84 billion. (I.e., the direct costs of cocaine production were at around 1 billion.). At the same time, the bulk of gross profit was obtained in North America (35 billion dollars) and countries of Western and Central Europe (26 billion dollars). At the site of cocaine production (South America, including the Caribbean), gross profits of $ 3,5 billion were received, i.e. total 4 percent of total gross profit from the sale of this type of drug in the world

(1) "Estimating Illicit Financial Flows Result from Trafficking and Other Transnational Organized Crimes". United Nations Office on Drugs and Crime. Vienna, October 2011.
(2) Glenn, an internationally organized crime specialist, for example, estimates the share of the drug business at 70%.
(3) Peter Reuter. Chasing Dirty Money - the Fight against Money Laundering. - Washington 2004, p. 20; ONDCP, Speech on Illegal Drugs, Washington DC, December 2001, p. 3. World Bank. World Development Indicators (WDI), 2011.
(4) The table is compiled according to the report: "Estimating Illicit Financial Flows Result from Drug Trafficking and Other Transnational Organized Crimes". United Nations Office on Drugs and Crime. Vienna, October 2011.
Author:
Originator:
http://www.fondsk.ru/
16 comments
Information
Dear reader, to leave comments on the publication, you must sign in.
  1. AVV
    AVV 30 January 2014 13: 55
    +3
    But the main dealer in the drug trade will sit in Sochi, these are the states !!! In Mexico, Colombia and Afghanistan everywhere the United States has its own interests and drive drugs around the world !!! So that the conversation will be about nothing !!!
    1. Jet
      Jet 30 January 2014 19: 34
      0
      We always have the "states" to blame for everything). This is a state point of view, it is easier for everyone: both citizens who receive the "guilty", and officials who quietly earn billions in the drug business. "Fight against drug trafficking" = "Fight against corruption" for a long time, according to the scheme "Bees against honey". Against this background, populist proposals to close borders, introduce a visa regime with the countries of Central Asia, etc., look especially stupid. Drugs are transported to Russia on an ongoing basis, by trucks, accompanied by representatives of special. services.
      1. Heccrbq.3
        Heccrbq.3 30 January 2014 22: 02
        +2
        Pay attention, only in Russia there is a drug control service. And how they control everything they see, I think which palaces they live in, what cars these controllers drive.
        1. ty60
          ty60 30 January 2014 23: 43
          0
          We have all the controllers living in the palaces. And they have on their hands the estimated cost of the palace as a makeshift of packing boxes. See. Robbery statistics are mainly Gaster. Drugs are those who should limit its delivery. When will our policemen NARROW now?
    2. Rattenfanger
      Rattenfanger 30 January 2014 23: 24
      0
      Quote: AVV
      In Mexico, Colombia and Afghanistan everywhere the United States has its own interests and drive drugs around the world !!!

      You are wrong about Mexico. There, pin_ dos were simply traded in a mitten at the turn of the 90s. 2000s. The result is a huge hemorrhage in the long run. And not so much in terms of the fight against drugs. Los Zetas and Sinaloa openly declare political demands and programs. For example, in the territory of Mexico and several US states (California, Texas, Arizona) it is planned to create El Republic Norte and Azteclan. Moreover, as life shows, their words and deeds do not diverge.
  2. Stinger
    Stinger 30 January 2014 19: 15
    -3
    There is only one way out. Legalize the sale and kill addicts.
    1. alone
      alone 30 January 2014 21: 23
      +1
      Are you going to become an executioner of drug addicts or what?))
  3. demel2
    demel2 30 January 2014 19: 35
    +1
    Russia came up with the initiative, it’s certainly good, but why so far we have such soft punishments for drug trafficking. In half of the countries of the world the death penalty for drugs, and we have 5-8 years. Someone seems to be benefited by this state of affairs the last people in the country have their own gesheft with the drug trade. IMHO are the ones who bring to us millions of gaster with tons of gerych.
    1. ty60
      ty60 30 January 2014 23: 52
      0
      It’s high time to set the threshold — a citizen of Russia-100 brought it minimally, without the right to parole. A citizen of another country — for life. And deported at the expense of the country whose citizen he is.
      1. officer29
        officer29 31 January 2014 00: 20
        0
        I wonder how you imagine the work of the deportation mechanism at the expense of the country of which the drug courier is a citizen? We can’t send Gaster at the expense of the employer (by law), but only for our hard-earned ones, and here the criminal is returned to his homeland, which he doesn’t need! wassat
  4. polkovnik manuch
    polkovnik manuch 30 January 2014 19: 46
    0
    Nobody ever fights with them (in only a few countries the death penalty is envisaged for cultivation and distribution) The rest only declare the fight! These include the Russian Federation and the USA and the Gayropeyskie democracies where the punishments for production, storage, distribution, use are simply FUN, but for this in .... it is necessary, as for the most serious crimes against humanity.
  5. Rus2012
    Rus2012 30 January 2014 19: 50
    0
    With significant amounts and regular operations, the drug mafia directly negotiates long-term cooperation with bankers.

    The main question - who are the "drug mafia", which in terms of finance is comparable to the powerful branches of legal business? And yet no one knows them ...
    As the late Ulyanov (the great actor) said - "everything is everywhere trampled by bureaucrats, they are everywhere and ... no one knows them personally" ...
    So here - who are they? Having answered this question - victory over them will become possible. Only who is interested in this, except for the common people ...
    Drug industry - the main supplier of dirty money in the banking sector

    Or maybe the main client and consumer of banking services, incl. cash?
  6. calocha
    calocha 30 January 2014 19: 52
    +1
    The Anglo-Saxons are to blame. For centuries, making huge fortunes on drugs, NEVER will ever abandon mind-blowing profits. You and I are blah blah blah, and they network of bases enveloping the Earth with airplanes deliver heroin and cacaine to anywhere ... Sowing grief and trouble ...
    1. Vasek
      Vasek 31 January 2014 00: 05
      0
      Quote: calocha
      The Anglo-Saxons are to blame. For centuries, making huge fortunes on drugs, NEVER will ever give up breathtaking profits

      They didn’t even fight with China - they just landed the whole country on opium, and milked as much as they could.
  7. Yaroslav
    Yaroslav 30 January 2014 20: 25
    0
    The main reason for the spread of drugs in Russia is the snatchers in uniform, for whom there is no honor of uniform, no professional ethics, and nothing sacred except for dough. Yes, yes guys, they cover drug trafficking at the regional level. And I didn’t suck this information from a finger, and everyone knows it. Until there is order in the Ministry of Internal Affairs, the problem cannot be solved, except perhaps: to create an "Armed People's Front" and patrol the streets.
  8. scientist
    scientist 30 January 2014 23: 52
    +1
    I propose a very simple but effective method. Send all seized drugs immediately to special zones for drug addicts. Soft drugs can not even be limited, but hard by prescription, as an encouragement for hard work. Then all drug addicts themselves will seek in these special zones, the streets will become tens of times cleaner, the number of crimes will be reduced by several times, and governments will finally take control of the situation. Some may say that this is inhumane. Of course, bending in the gateways, robbing and killing for a dose is probably more humane. But you can do all this under the supervision of a doctor. honestly earn your own dose by working in the production zone, in mines and logging. You can’t even imagine how much the addict is ready to do in order to be able to smoke a joint in the evening. Yes, he will turn mountains, he will make masterpieces, but he will need to fly into space and this will be his own element for him. And for sure, if you want to be able to recover from drug addiction. That's just not everyone will have a desire. Since this is more a social disease than psychological dependence. And yet, now creating special zones for drug addicts, where they can easily be poisoned without frightening others with their views, is the best option and it is worth trying it at least in the region in which drug addiction is most prevalent.
  9. Finoll
    Finoll 30 January 2014 23: 53
    0
    strengthen the border in Asia and spray boron salts over crops.
    1. siberalt
      siberalt 31 January 2014 02: 13
      +1
      Such an offer has already been received from Russia. I don’t know what salts to sprinkle with poppy seedlings. But the essence was different. After pollination from planes of poppy plantations, a violation at the genomic level occurs and poppy seeds cease to germinate. To which the Americans replied - and to what then the Afghan people live. Here they are humane. Although it is no secret to anyone that opium from Afghanistan is illegally smuggled in military aircraft.
    2. siberalt
      siberalt 31 January 2014 02: 13
      +2
      Such an offer has already been received from Russia. I don’t know what salts to sprinkle with poppy seedlings. But the essence was different. After pollination from planes of poppy plantations, a violation at the genomic level occurs and poppy seeds cease to germinate. To which the Americans replied - and to what then will the Afghan people live. Here they are humane. Although it is no secret to anyone that opium from Afghanistan is illegally smuggled in military aircraft.