Corruption Watch: June 5, 2003

By Roman Kupchinsky

Russian President Vladimir Putin issued a number of presidential decrees on 11 March that are intended to allow the government to wage a more effective battle against crime and corruption. Putin's major innovation was the creation of an independent antidrug agency that will include staff and resources from the Tax Police and will be called the State Committee for the Control of Narcotic and Psychotropic Substances.

Drug trafficking and drug addiction are among the greatest problems facing Russian society in the postcommunist era. The phenomenal growth of this criminal enterprise, and the toll it is taking on young Russians, is staggering. According to a December 2002 article in the journal "Profil" (No. 46), there were fewer than 40,000 addicts in Russia in 1997, according to official sources. While those might have been extremely conservative figures, today there are between 3 million and 4 million drug users, according to an Interior Ministry official quoted by Interfax on 5 February. More than 60 percent of addicts are under 30 years of age, and an estimated 20 percent are schoolchildren. The average Russian drug addict begins his or her habit at the age of 15-17, according to the official.

According to the U.S. State Department's "International Narcotics Control Strategy [INCS] Report" for 2002 (http://www.state.gov/g/inl/rls/nrcrpt/2002/html), 80 percent of HIV and AIDS infections in Russia are linked to intravenous drug use. The steep increase in the number of reported HIV cases in Russia in the past three years attests to a growing epidemic of drug abuse. The problem has reached such proportions that some regions of Russia are posting the fastest increase in HIV infection in the world. The dpa news agency on 14 May reported the findings of French researchers who claim there are "a million people, mostly injecting drug users, who are now thought to be carrying the AIDS virus in Eastern Europe and Central Asia. All are likely to contract AIDS when their incubation periods come to an end."

Another side effect of the narcobusiness is the vast amount of money it generates for organized-crime gangs in Russia. By some estimates, that sum exceeds the amount made in the Russian petroleum business: some $8 billion-11 billion in narcotics revenues in 2001, according to "Profil." As a rule, most of that money is recycled back into either the narcotics trade or a related criminal enterprise. With Russia increasing its vigilance against money laundering to help hinder terrorism, organized-crime groups now find it more difficult to send their ill-gotten gains abroad, so they use these vast sums to bribe corrupt officials and enter the world of legitimate enterprise.

The major source of narcotics for Russia is Afghanistan. Afghan heroin -- and this is the most commonly used hard drug in the country -- is relatively inexpensive (in 2000-02, the cost ranged from $10-35 per gram). Today it has stabilized at approximately $15 per gram. For the average Russian addict, this is still an expensive habit; and more often than not, it is a habit that requires some type of criminal activity to support. While Russian Interior Minister Boris Gryzlov reported a 22 percent drop in drug-related crimes in 2002, this should be seen in light of the new Criminal Procedure Code, which raises evidentiary requirements for arrests or for the launch of criminal cases. As the INCS report points out: "The MVD [Russian Interior Ministry] reports that their experience reflects an actual increase in drug-related crimes."

Afghan heroin enters Russia from Tajikistan and Kazakhstan, where a lack of proper border controls and rampant corruption among local officials makes this an easy task for Central Asian organized-crime gangs. Once inside Russia, the drug is bought by Russian criminal groups for domestic consumption or for delivery to Western Europe.

Widespread addiction to heroin began in Russia in approximately 2001, when large stockpiles of opium were sold by Afghan farmers to Western buyers. When the U.S.-led coalition deposed the Taliban (who in the summer of 2000 banned poppy cultivation under pressure from Pakistan and the West) during its 2001 operation to hunt down Osama bin Laden and his Al-Qaeda network, the cultivation of poppy increased dramatically. By 2002, the crop was reaching record proportions of 3,500-4,000 tons of heroin despite efforts by the new Afghan government to introduce a crop-replacement program. The prognosis for 2003 is not optimistic.

In eastern parts of Russia, Vietnamese and Chinese criminal groups, who deal mainly in heroin and opium, bring narcotics into the country. According to anecdotal reports in the Russian press, the Russian Far East is the most problematic region in the federation in terms of drug abuse and corruption.

One of the more severe problems associated with the Russian narcobusiness is the threat it poses to the European Union. According to a report by the Europol Analysis Unit (File No. 2520-31, 6 September 2001), the movement of heroin from Central Asia, Afghanistan, and Pakistan toward the EU is aggravated by the unstable political and economic situation in the region. Another important factor exacerbating the Russian problem is increased vigilance on the part of Iranian authorities against Afghan drug smugglers, who have consequently been forced to seek out alternative routes through Central Asia. The effect on countries like Tajikistan is enormous. According to a report by the International Crisis Group in April (http://www.intl-crisis-group.org/projects/showreport.cfm?reportid=955), the volume of narcotics coming out of neighboring Afghanistan is such that Tajik drug-control officers are overwhelmed: "The Drug Control Agency under the Presidential Administration reported that about 5,500 kilograms of narcotics were seized in Tajikistan in 2002. The amount actually penetrating the border is estimated to be at least ten to fifteen times higher than what is seized." Some local observers suggest the trafficking problem is eclipsing Islamic radical activities as Tajikistan's top security threat.

This has led to the increased importance of the so-called Silk Route: from Central Asia to Russia, and on toward Ukraine and Central Europe.

Available evidence suggests that there is no single "drug cartel" in Russia akin to the Colombian cartels. Russian criminal organizations have thus far avoided organizing themselves into such networks and tend to operate in smaller units. Many of these smaller organizations are active in the EU. The Europol report cites the Finnish drug market as one controlled by Russian and Estonian organized-crime groups. Recent reports in the Czech press suggest that Central Asian and Russian narco-criminals have been active in that country.

Can the situation be reversed? If the stated views of Russian law-enforcement agencies are to be believed, then the situation is "under control." Interior Minister Gryzlov said in a recent speech notable for its optimism and upbeat tone, as published in the newspaper "Shchyt i Metch" of 13 February: "The heightened awareness of the country's leadership to this problem [narcotics]...led to the 'Comprehensive Program to Combat the Abuse of Narcotics and Its Illegal Trade for 2002-2004.' This, along with other measures, enabled us to keep the narcotics situation under control." The minister went on to list a number of drug busts that took place in early 2003 and reported (as evidence that his ministry does indeed have the situation under control) that 30 members of transnational organized-crime groups dealing in narcotics have been arrested by the MVD. He even went so far as to claim that the rates of HIV infection in Russia have dropped. According to the "INCS Report," the Law on Narcotics and Psychotropic Substances adopted in 1998 that criminalized the purchase and possession of drugs and stiffened penalties for distribution and large-scale trafficking "has done nothing to discourage the growing substance abuse in Russia, [although] it has given law enforcement a somewhat increased ability to deal with serious drug traffickers." The question is whether this "increased ability" has been put to use. Arguably, it has not. For, otherwise, Putin would not have been forced in March to create this new, independent agency to combat the narcotics threat to his country.

Criminality in Russia continues to rise, according to figures provided to the Federation Council and to Putin by Russian Prosecutor-General Dmitrii Ustinov in April 2002. In 2000, there were 31,800 reported homicides in Russia; in 2001, the number rose to 33,500. Some 2 million Russians were the victims of crime in 2001 -- and this number might well be low, given reports that the police concealed many crimes and many more went unreported. In 2001, 884,300 crimes went unsolved. While these figures do not, of course, identify crimes connected to narcotics abuse, it is fair to assume that many were.

Russians, along with their neighbors, might be watching hopefully for signs that Putin's new antidrug force is able to combat the threat more successfully than its predecessors.

(See also "Crime in Putin's Russia," "RFE/RL Organized Crime and Terrorism Watch," 13 and 20 February 2003.)

Closely connected to the growing epidemic of narcotics abuse (with all its side effects) in Russia are those Central and Eastern European countries bound for membership in the European Union. This huge market will soon have porous borders within the EU and, given the present levels of corruption in many of them, they are prime candidates for a major influx of drug dealers and manufacturers of club drugs.

The "INCS Report" for 2002 provides a considerable amount of information on each country in this region and its current status in the war against narcotics.

The emerging picture of the heroin trade in 2002 in Europe shows a web, with Afghanistan at its center. From there, heroin is transited through Central Asia and it spreads out in a generally westward and southwesterly direction toward traditional drug-smuggling routes bordering on the EU states. Most of these routes have one thing in common: They often lead through poorly policed and arguably corrupt states on the periphery of Europe -� Turkey, Albania, Bulgaria, and Iran -- and from there to Italy and north through Slovakia into Austria, Germany, and on to France and England.

The emerging route is the Silk Route through Russia to Lithuania, which acts as a hub for the heroin trade to Poland and Scandinavian countries.

The countries of Central and Eastern Europe were relatively drug-free under the old socialist regimes, when a strong police presence was the prime deterrent. By the early 1990s, the problem had begun to emerge, however; and when Afghan heroin began flooding the market in 2001, the problem became serious. In 2001, Bulgaria seized as much heroin as all other European countries combined. Hungary, which for decades had been drug-free, became a major transit point for Southwest Asian heroin entering through borders with Romania and the former Yugoslavia. At the same time, the number of drug users in Hungary mushroomed to 200,000, most of them young people. The newly formed state of Bosnia and Herzegovina was unable to cope with the drug traffic through its borders.

The Czech Republic became a major producer of pervitin, a club drug used by some 22,000 Czechs. Vietnamese, Nigerian, and Russian gangs in the Czech Republic began large-scale smuggling operations both into the republic and further west.

A Russian investigation recently revealed the true global effort required to run a contemporary drug ring. One Russian organized-crime group not only imported cocaine from Colombia, but also ran a laboratory for the manufacture of a synthetic drug called mandraks, which the group sold in large quantities to distributors in African countries using Romania as a transshipment point. The laboratory equipment was imported from China, while the chemicals for the preparation of mandraks were bought in China in the mid-1990s; and 12 tons of the required ingredients were brought into Russia hidden in shipments of talcum powder and house slippers (see "RFE/RL Organized Crime and Terrorism Watch," 24 April 2003).

Ukraine, not a major producing or transit country, has over 78,000 addicts. Some 42,000 individuals were arrested in 2002 on drug-related charges. However, the country finds itself in the middle of a significant transit corridor for Afghan heroin. Numerous ports on the Black Sea, coupled with underpaid and poorly equipped border forces, make Ukraine a natural target for organized criminals.

In Poland the drug business generated some $324 million last year for the three major drug-smuggling organizations operating in Warsaw, Gdansk, and Krakow, according to Polish news agency PAP on 26 February. Much of those revenues stem from the contacts these groups have established with South American cocaine cartels. Poland today has between 30,000 and 70,000 addicts.

The insatiable appetite of Western Europe for heroin and cannabis created a multimillion-dollar business among the states of the former Warsaw Pact. Italy, with 500,000 drug users, provided numerous jobs for poor Albanians who went into drug running by using powerboats to crisscross the Adriatic to supply waiting Italian distributors.

Britain has an estimated 250,000 opiate addicts using heroin, crack, and powder. The number of cocaine users has increased over the past five years. Statistics show that 12 percent of Britons aged 16-59 used drugs in 2002. That same year, 28 percent of 16-19 year-olds reported using drugs. According to the "INCS Report," some 30 tons of heroin, mostly from Afghanistan, enters the United Kingdom every year. Colombian cocaine, about 25-40 tons per year, enters in a variety of ways �- from mainland Europe and by "mules" from Jamaica, which is a major transshipment hub for Colombian cocaine.

There is gathering evidence that Colombian organized-crime groups have been exploring a new route to Western Europe -� via Russia and Poland. RK

Some 1,100 kilograms of cocaine was confiscated in 1993 by Russian police in a container truck in St. Petersburg. The drug was hidden in cans marked "meat" and "potatoes" and had arrived from Finland. Russian authorities had been tipped off in advance by a foreign police force that was not identified. Writing about this case, AP on 5 November 1993 reported: "'The cocaine was being brought in from Colombia, and they were going to take it from Russia to Europe,' said Aleksandr Sergeev, antidrug chief of the Russian Interior Ministry."

Ten years later, the trial began in Moscow of four suspected members of a drug-trafficking ring. Among other charges, the defendants were accused of smuggling drugs from Colombia to Russia for shipment on to Great Britain. According to an article in "Izvestiya" from 14 April, the group first came to the attention of the antinarcotics section of the Russian Interior Ministry in April 2000, when a shipment of cocaine from Colombia to Russia made a stopover in Miami, Florida. There, U.S. law-enforcement officials discovered that the declared cargo of industrial equipment contained 64 kilograms of cocaine hidden in the packing. The U.S. Drug Enforcement Agency informed Russian police and, when it arrived at Sheremetyevo II Airport on 13 May 2000, police placed it under surveillance. After a few weeks, the police identified the men who eventually claimed the cargo from the customs broker and were preparing to ship it to England for street sale. The estimated street value of the shipment was $60 million. It was then that the arrests were made.

By 2002, the Russian Mafia seemingly was everywhere: in Cali, Colombia; in San Francisco; in Florida; and in Europe. Ships owned and manned by Russians and Ukrainians were shipping cocaine from South America to the United States and Europe. In July 1999, the "M/V Tammsarre" was seized in Spain with over 10 tons of cocaine on board. The shipment was linked to a Russian drug trafficker who owned the ship and other criminal groups who intended to distribute the cocaine in Europe. In January 2000, the "MV Nativa" was seized off the coast of Arica, Chile, with 8.8 tons of cocaine bound for Europe. The vessel had 10 Ukrainian crewmembers, some believed to be involved in the smuggling operation.

According to the U.S. Drug Enforcement Agency website (http://www.usdoj.gov/dea), a typical Russian method of delivering cocaine from South America is to hide it inside machine tools or automobiles. It is then smuggled to the United States, and from there to Europe and Russia. One Russian group in California smuggled 26 kilograms of cocaine in a car shipped to Moscow via Belgium. A different group hid 64 kilograms of the drug inside a machine tool that went from South America through Miami to Moscow.

These are just a few examples of how, in the past decade, Russian organized crime and South American drug cartels have embarked on collaboration. According to testimony by Steven C. McCraw, the deputy assistant director of the FBI's Investigative Services Division, presented before the House Judiciary Subcommittee on Crime on 13 December 2000, organized-crime gangs are using the increased ease of international travel and the latest advances in technology and communications to further their illegal efforts. As an example of this newly found mobility, McCraw cited Oleg Kirilov, the leader of a Russian criminal group who established operations in Miami to launch a cocaine-smuggling route between Peru and Russia. The FBI's investigation showed that this network stretched from a number of locations in the United States to Russia, Europe, and South America. The group engaged not only in drug trafficking, but also in stock manipulation, credit-card fraud, and car theft. Kirilov and a number of his associates were eventually convicted for these crimes.

Russian organized-crime groups and cocaine cartels in South America appear to be increasing their cooperation, and the budding cocaine route via Russia to Europe is likely to increase in volume as a result. RK

The key to seriously addressing the drug problem in Russia, Europe, Iran, Central Asia, and Pakistan lies in the valleys of Afghanistan. In 2002, the gross income of the average Afghan family involved in poppy-seed cultivation was $6,500. In 1994-2000, the figure was $750, according to a UN Office for Drug Control and Crime Prevention report released on 3 February. The fall of the Taliban regime, which resulted in the destruction of much of Al-Qaeda's abilities to conduct terrorist operations, also provided the opportunity for impoverished Afghan farmers to once again flood the market with heroin.

Iran has approximately 1 million chronic opiate abusers, Pakistan approximately 700,000, and Central Asia 300,000. These countries are systematically being torn apart under the influence of heroin and related opiates, not to mention AIDS. While the impact on youth in these countries will be debilitating for decades to come, drug traffickers netted about $2.2 billion in Central Asia alone in 2002. More than three-quarters of the opium being sold in Europe originates in Afghanistan. On 14 May, "The Washington Times" reported a seizure of 40 pounds of Afghan heroin, worth up to $4 million, at New Delhi's airport. It was being smuggled inside almonds.

Writing in the preface to the UN report, the executive director of the UN Office for Drug Control and Crime Prevention, Antonio Maria Costa, mused: "Why is the international presence in Afghanistan not able to bring under control a phenomenon connected to international terrorism and organized crime? Why is the central government in Kabul not able to enforce the ban on opium cultivation as effectively as the Taliban regime did in 200-01?"

Despite the efforts of Afghan leader Hamid Karzai to launch a poppy-eradication program along with the governors of the five main drug-producing provinces in 2002, there appears to have been little success in stopping the flow without effective government control over the growing regions. Local warlords are providing the farmers with protection against the recently formed central government and are paying them a huge price, in Afghan terms, for their crop. Efforts to implement crop-replacement programs have also proven to be ineffective due to a lack of funding.

The West claims to have a strategy for dealing with the complexities of Afghan opium cultivation, but is it working? According to the "INCS Report," "[Transitional Administration Chairman] Karzai issued a decree on January 17, 2002, banning cultivation, production, processing, illicit trafficking, and abuse of narcotic drugs. On April 3, 2002, the interim government of Afghanistan issued an executive order to eradicate opium poppy fields in the country, with compensation being paid to farmers who eradicated. The eradication process started on April 8, 2002, in Helmand and Nangarhar Provinces. Approximately 16,500 hectares were eradicated. (The UNODC estimated that more than twice as much land in Afghanistan was sewn to poppy.) On September 4, 2002, as the season for planting poppy for the 2003 harvest approached, President Karzai issued another very strong declaration urging farmers not to plant poppy. In addition, the [Transitional Administration] sought support from the provincial governors and religious leaders for implementing the poppy ban. Nevertheless, the number of hectares of poppy eventually harvested during 2002 makes Afghanistan the world's leading opium producer this year. However, cultivation in Afghanistan was reduced substantially from the record levels of the late 1990s."

It remains to be seen whether these efforts will result in reduced poppy crops. If not, then much harsher measures might be needed. The notion of a UN Drug Eradication Military Unit might be one answer. If the Security Council were to deem such action necessary to prevent the further disintegration of societies and the spread of HIV and AIDS, then such a multinational drug-eradication unit might be a useful and powerful tool in the hands of law enforcement. RK