Global Challenge 12:

How can transnational organized crime be stopped from becoming more powerful and sophisticated enterprises?

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Transnational organized crime takes in between 3% to 7% of world GDP annually; averaged together that would be $4.7 trillion per year, which is more than twice all military the world’s annual budgets combined ($2.2 trillion). estimates the value of just black-market trade in 50 categories from 91 countries (105 countries not included) at $1.81 trillion, not including extortion, racketeering, corruption, and money laundering (due to their overlapping nature). Cybercrimes increased 600% during the pandemic. They have grown from $3 trillion in 2015 to an estimated at $8 trillion in 2023 and are forecasted to reach $10.5 trillion annually by 2025 and over $13 trillion by 2028. Governments are increasingly suspected of outsourcing information warfare to cyber criminals to affect national elections. Distinctions among organized crime, insurgency, and terrorism have begun to blur, giving new markets for organized crime and increasing threats to democracies, development, and security. Hence, the total income of organized crime could be closer to $10 trillion per year. Interpol’s 2022 Global Crime Trend states that transnational organized crime is evolving at an unprecedented pace.

In addition to these financial implications, the human misery caused by transnational organized crime must be taken into account. From terrorized villagers caught in gang wars, to deaths around the world due to fake drugs, organized crime is a crime against humanity that the ICC does not yet recognize. For example, according to The World Health Organization, “the manufacture, distribution, and supply of SF medical products is a low risk/high return activity with disproportionately low sanctions, and as such has attracted the attention of organized criminal activity”. Further, WHO reports that about 1 in 10 drugs in low and middle-income countries are counterfeits and that half of all drugs sold online are counterfeit. Illegal trade in wildlife is about $20 billion per year.

Problems persist in both the methodologies of researching transnational organized crime and in the policymaking process to address it. Statistics about the issue are inherently difficult to verify, and this has complicated efforts to develop a global prohibition regime against TOC. Although the UN Convention against Transnational Organized Crime came into force in 2003, a global prosecution strategy has not emerged; however, a review to improve the treaty is underway. OECD’s Financial Action Task Force has made 40 good recommendations to counter money laundering, and the Council of Europe’s Convention on Laundering came into force in May 2008, but the impacts are not clear. After years of Millennium Project interviews of relevant senior government officials, the outlines of a global strategy to counter TOC have emerged.

A financial prosecution system could be established as a new body to complement the related organizations addressing various parts of TOC today. In cooperation with these organizations, the new system would identify and establish priorities on top criminal groups (defined by the amount of money laundered) to be prosecuted one at a time. It would prepare legal cases, identify suspects’ assets that can be frozen, establish the current location of the suspects, assess the local authorities’ ability to make an arrest, and send the case to the court selected by lottery among the courts nominated by their governments. Such courts, similar to UN peacekeeping forces, could be trained, and then be ready for instant duty. When investigations are complete, arrest orders would be executed to apprehend the criminal(s), freeze access to their assets, open the court case, and then proceed to the next TOC group or individual on the priority list. The prosecution would be outside the country of the accused. Although extradition is accepted by the UN Convention against Transnational Organized Crime, a new protocol would be necessary for courts to be deputized, similar to the way military forces are deputized for UN peacekeeping. After initial government funding, the system would receive its financial support from frozen assets of convicted criminals rather than depending on government contributions, which could be subject to bribery by organized crime. Countries that made the arrests and courts that prosecuted the cases would receive reimbursements from the frozen assets.

Meanwhile, the increasing digital transition is an anti-corruption approach that is improving transparency as money flows from government budgets to public institutions to citizens with less chance of illegal intervention. One example is the combination of national biometric identity and an immediate payment system. In India the national biometric identity (Aadhar) is reducing the cost of eKYC (electronic Know Your Customer) from $12 to 6 cents [JH: per transaction?]. The Unified Payments Interface (UPI)  provides an open Application Programing Interface (API) with an instant 24/7 channel-independent payment system (Immediate Payment Service – IMPS). It is accessible through mobile phones, the internet, ATM, and Unstructured Supplementary Service Data (USSD) on basic phones with low-speed mobile internet access. This system increased transaction volume by 55% and increased total value by 40% from March 2023-2024. The third element of this new system that is reducing corruption in India is the Data Empowerment and Protection Architecture (DEPA). It includes: 1) A personal data-protection bill; 2) An electronic consent artifact that captures user consent for sharing personal data with third parties; and 3) A newly regulated entity known as consent managers, called Account Aggregators (AAs) in the financial sector. These AAs are NBFCs (non-bank financial companies) that RBI regulates.

  • Conduct a feasibility study of the above TOC financial prosecution strategy.
  • Include organized crime as a crime against humanity recognized by the ICC.
  • Utilize DarkBERT AI that is pretrained on Dark Web data to help attack organized crime.
  • Analyze outcomes and study transferability of India’s demonetization attempt to reduce organized crime
  • Draw lessons from the end of Colombia’s conflict with FARC, which sustained its armed insurgency with illicit drug trafficking, illegal mining, and extortion.
  • Engage farmers in high-income agricultural alternatives to illegal production and focus policing efforts on drug traffickers rather than peasant farmers who grow illicit crops.
  • Implement globally more national, secure, integrated digital systems like the Aadhar, UPI and DEPA systems in India to provide more secure financial services for close to the entire population.

Africa: The income from foreign aid to Africa and its losses from organized crime over the last 50 years are about the same – one trillion dollars; each year since 2000 it loses over $50 billion to illicit financial flows. Organized crime continues to increase with Central Africa registered the highest criminality increases.  Hundreds of billions of dollars are siphoned out of the continent through money laundering and industrial scale corporate tax avoidance. In North Africa, cannabis trade, human smuggling and arms trafficking make up one of the largest criminal markets. Algeria and Morocco witnessed a large number of cocaine seizures in 2022. Nearly 14 million AIDS orphans in Sub-Saharan Africa, with few legal means to make a living, constitute a gigantic pool of new talent for the future of organized crime. ECOWAS is working with West African governments to improve coordinated implementation of counter-crime strategies. The majority of Rhino poaching is in South Africa, with 1,700 rhinos poaches in just one national part – Kruger – between 2017 and 2021, but today the numbers are decreasing.

East Africa piracy has been stopped due to US and China cooperation: no major vessels have been held for ransom since 2015. Sea piracy has also been reduced in the Gulf of Guinea due to international Naval cooperation. Interpol undertook a joint effort in 2022 against numerous West-African crime groups including Black Axe, which make up the majority of the cyber-financial crime. The West African region is now a major manufacturing hub in meth and has witnessed a rise in seizures of cocaine shipments. Eswatini (former Swaziland) is one of the top destinations for human trafficking victims, who often are trafficked from Nigeria, South Africa, and Asia. Although their government created a National Plan of Action in combatting and eliminating child labor, the results have been largely negative. Although most Sub-Saharan countries have signed or ratified the UN Convention Against Corruption, the 2022 Corruption Perception Index reported that more than 90% of sub-Saharan countries score poorly on the index. The highest perception of corruption are the Democratic Republic of Congo, South Sudan, and Somalia, and the least corrupt are Botswana and Seychelles. Anti-Corruption measures in South Africa have largely been unsuccessful, as it has been inefficient in pursuing extradition treaties.

Asia and Oceania: Asia continues to have the greatest number of slaves, but per capita it is the third largest with 6.8 per thousand. The 2023 Global Slavery Index estimates 50 million people around the world are in modern slavery (cannot refuse or leave because of threats, violence, coercion, or deception, includes forces marriages and forced labor) of which 29 million are in Asia; 52% or 15 million are forced labor and 28% (14 million) are forced marriage. North Korea has the most slaves per capita; about 10% are slaves. The highest numbers are in India (est. 11 million) and China (est. 5.8 million). Afghanistan grows 80% of the world’s opium, which has increase 32% since the Taliban regained power.  China is the main source for counterfeit goods sent to the EU. The relative deficit of females in China is leading to their being trafficked in from adjoining countries for marriage. India is a major producer of counterfeit medicines. North Korea is perceived as an organized crime state backed up by nuclear weapons, involved in illegal trade in weapons, counterfeit currency, sex slavery, drugs, and a range of counterfeit items. Myanmar is accused of deporting migrants to Thailand and Malaysia, where they are exploited, and has reportedly become a center for the ivory trade and elephant smuggling. Since the Myanmar’s February 2021 military coup, drug production has increased to become one of the world’s leading source for methamphetamine, followed by the heroin. Myanmar and China remain the primary sources of amphetamine-type stimulants in Asia. Laos had almost eliminated opium production, but the problem has now returned. Opium cultivation in Myanmar increased by 33% between 2021 and 2022,  rapidly overtaking Afghanistan’s output. UNODC reports synthetic drug production has increased over the past decade, with some recent indications of some declines. Australians are among the world’s highest per capita consumers of illicit stimulants. Illegal international trade in human organs from the low income people in the region are worldwide for as much as $50,000 to $120,000 for a single kidney.

Europe: The UK has begun a review process of the UN TOC treaty. Europol has published the EU Serious and Organized Crime Threat Assessment (SOCTA 2013), a systematic analysis of law enforcement information on criminal activities and groups affecting the EU. The report estimates that there are 3,600 active organized crime groups in the EU, 70% are composed of multiple nationalities, and that counterfeiting, substandard products, and cybercrimes are growing. There is a tendency for gangs to be replaced by individual criminal enterprises. The main illicit markets in the EU generate around 110 billion euro each year. The SOCTA is designed to assist strategic decision-makers in the prioritization of organized crime threats. According to the 2022 European Drug Report 29% of adults (aged 15–64) have used an illicit drug (50.5 million males and 33 million females). Europol is also funding a new European Cybercrime Centre to provide technical, analytic, and forensic help in investigations. The EC has adopted the EU Strategy towards the Eradication of Trafficking in Human Beings. The U.S. State Department ranked Russia, China, and Uzbekistan lowest in anti-human-trafficking performance. The UK’s National Crime Agency cooperates internationally to prevent crimes from entering the UK. Organized crime costs the UK £20-40 billion a year, and has 38,000 known individuals as part of 6,000 gangs. The EU has strengthened controls on money transfers across its borders to address trafficking and money laundering, especially in Eastern Europe, but the 2007 accession of Bulgaria and Romania has made trafficking of women from those countries easier. In 2012 an INTERPOL-led operation against illicit goods trafficking in Eastern Europe rounded up more than 1,400 individuals and seized 7.3 million illegally trafficked goods. Russian officials have declared the drug situation in that country “apocalyptic”, but the Financial Action Task Force has moved Russia up a level in its evaluation of countries’ combating of illegal financial transactions, putting it higher than the U.S. and Japan in that regard. Russia has enacted a tough new anti-poaching law, making it a crime to simply possess any endangered species material.

Latin America: Large numbers of children are fleeing drug wars in Central America to cross into the U.S. Mexico is the most dangerous country for civilians with more than 5,000 violent acts against civilians during 2023. There are 70 active armed gangs fighting over control of illegal trade in Mexico. More than 60,000 people were killed in Mexican drug violence in 2006-2012; annual deaths fell from 2012 to 2015, but began to rise again to over 30,000 per year between 2017 and 2024. Mexican drug cartels make about $35 billion to $45 billion per year. These cartels are moving south into Central America, and are branching out, with La Familia exporting $42 million worth of stolen iron ore from Michoacán in a year. Heavy police crackdowns in Guatemala and Honduras have only made the gangs better organized and more violent, as corruption and lack of institutional transparency amongst the police force remains a constant issue. However, after El Salvador President Bukele crackdown on violent gangs (including jailing anyone with a tattoo), homicide rates in El Salvador fell 69% in 2023, much further than their peak in 2015. UNODC says crime is the single largest issue impeding Central American stability. Some Latin American countries say it is time to legalize drugs, considering the costs/benefits and as a strategy to curb gang violence. Drug purveyor is often the only cash job available to a youth in Latin America. Colombia’s government passed a bill for decriminalizing the cultivation of “drug plants,” while drugs’ processing and trafficking remain criminal. Uruguay became the first country in the world to legalize marijuana. The OAS has held discussions around changing drug laws, calling for drugs to be treated as public health issue, judicial reforms, and recognizing that TOC is a major factor in the regions drug issues. These are part of Latin America’s strategy for curbing drug trafficking. Brazil has instituted a $2.2 billion plan to combat crack trafficking and abuse nationwide, and UNODC and the federal government have begun a program to promote protective family relationships. The drug gangs have largely replaced the paramilitaries. Ecuador has become an important drug route, with its drug trade being controlled by foreign organizations. Mexican cartels control cocaine production in Peru generating more than $22 billion per year. While cocaine production is down 12% in Bolivia, and 25% in Colombia, Peru became the world’s top cocaine-producing nation. The “war on drugs” in Latin America is hindered by the lack of joint strategy among the governments of North and Latin America. It is also complicated by Latin America’s being a major locale for the phenomenon of “criminal diaspora” – criminals being driven to adjoining countries by law enforcement or seeing more opportunities for profit in the territory just over the border. According to UNODC’s report Transnational Organized Crime in Central America and the Caribbean: A Threat Assessment  the region has 27% of the world’s murders, including gang-related killings, with only 8.5% of world’s population.

North AmericaCanada has made recommendations to improve the UN Treaty on TOC. The Obama Administration issued its Strategy to Combat Transnational Organized Crime to bring more national coherence a counter organized crime strategy. Transnational Organized Crime Rewards Program authorizes the Secretary of State to give rewards for actions that help dismantle transnational criminal organizations, identify or locate key leaders, disrupt financial mechanisms, and lead to the arrest or conviction of members and leaders. The U.S. has a third of the world’s illegal market value at $625.6 billion. The International Organized Crime Intelligence and Operations Center integrates U.S. efforts to combat international organized crime and coordinates investigations and prosecutions. Drug criminal gangs have swelled in the U.S. to an estimated 1 million members, responsible for up to 80% of crimes in communities across the nation. Organized crime and its relationship to terrorism should be treated as a national security threat. Canada continues as a major producer and shipper of methamphetamines and ecstasy. Canada has legalized marijuana, as have many American states; other states are expected to follow creating a legal conflict between state and federal law. More than half the U.S. has legalized Marijuana for recreational and/or medical purposes.