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FIMUN 2020 STUDY GUIDE COMMITTEE: UNODC
Topic-1: Preventing Illicit Financial Gain from Drug Trafficking and Organized Crime Committee Directors: Azra Rüya Kaykaç / Dilay Keskin /
Ali Emir Şanal
Distinguished Delegates,
It is our pleasure to welcome to Final Model United Nations 2020, we are
delighted for being able to host you in this year’s UNODC committee.
The UN Office on Drugs and Crime is one of the most entertaining yet
challenging committees. This committee mainly deals with illicit drugs and
organized crime. Some of the world’s biggest and most dangerous issues are
tackled here. The committee plays a big part in researching and combating
international drug cartels and crime syndicates.
The mission of the committee is to enforce the knowledge within delegates;
you are required to do your own research, as well as to stick with your
country´s position. We expect every delegation to have accurate information in
order to debate the topics. Your research should be based on facts and existing
information about the topics.
We aspire towards constructive debates, long term solutions, and well-written
resolutions. We’re looking forward to meeting you all. If you have any
questions don’t hesitate to contact us via:
Introduction to the Topic
2011 of the Global Commission on Drug Policy stated that “The global war on
drugs has failed, with devastating consequences for individuals and societies
around the world. Fifty years after the initiation of the UN Single Convention on
Narcotic Drugs, and 40 years after President Nixon launched the US
government’s war on drugs, fundamental reforms in national and global drug
control policies are urgently needed.”
Organized crime groups have existed in various parts of the world for centuries,
and they have been involved in the international drug trade for almost 100
years. Over this time, their operations and structures have been transformed
by technology, legislation, and shifts in politics; many of the most infamous
drug trafficking gangs have come and gone.
It is estimated that 35% of organized crime units are participating in drug trafficking and that transnational organized crime groups across the globe were estimated to have generated between approximately one fifth and one-third of their revenues from drug sales. However, organized crime groups have widened their portfolio of illicit activities. New crime areas such as cybercrime and environmental crime have emerged. Fewer groups are exclusively dedicated to drug trafficking, while more are also operating in other illicit sectors. However, a UNODC study with a global focus suggested that by 2002 half of the
40 criminal groups operating in the 16 countries investigated counted illicit
drugs as their main or core activity. Despite the transformations in recent
decades and a trend towards crime diversification, the drug market continues
to play a key role in organized crime activities. In Europe, illicit drugs not only
constitute the single largest organized crime market.
Definition of Key Terms:
Organized Crime Group
A structured group of three or more persons, existing for a period of time and
acting in concert with the aim of committing one or more serious crimes or
offenses in order to obtain, directly or indirectly, a financial or other material
benefits
Illicit
Not allowed by the law
Drug Trafficking
The smuggling, distribution, and sale of illegal drugs
Opiates
A subset of opioids comprising the various products derived from the opium
poppy plant, including opium, morphine, and heroin.
War on drugs
A largely unsuccessful campaign, led by the U.S. federal government, of drug
prohibition, military aid, and military intervention, with the aim being the
reduction of the illegal drug trade in the United States.
Market
The business or trade in a particular product, including financial products
Corruption
Illegal, bad, or dishonest behavior, especially by people in positions of power
Money Laundering
The crime of moving money that has been obtained illegally through banks and
other businesses to make it seem as if the money has been obtained legally
Smuggling
The act or process of taking things or people to or from a place secretly and
often illegally:
Drug cartel
A drug cartel is any criminal organization with the intention of supplying drug
trafficking operations.
General Overview:
Billions of dollars flow through the hands of drug trafficking organizations each
year, and what they do with that money can have a huge impact on local and
wider economies. They might smuggle cash out of their home country, buy or
build real estate, invest in restaurants and casinos for money laundering
purposes, or stash their profits in offshore financial centers. Depending on the
method they choose, property prices can be distorted, unfair competition
created, licit businesses crowded out, corruption bolstered and the climate to
attract international investment spoilt, ultimately eroding rule of law and
economic stability.
The 2010 estimate in the European Union was equivalent to roughly 25 percent
of overall criminal proceeds, making drugs the third-largest source of income
from organized crime there, after tax fraud and counterfeiting. Excluding tax
fraud, drugs accounted for 34 percent of total revenues of organized crime in
the European Union.
Drug sales expressed in constant currency units have fallen in the United States
since the late 1980s, but in Europe, they have increased over the past two
decades. This suggests that the marked decline in the proportion of drug sales
to GDP in Europe is the result of stronger growth of GDP in other sectors rather
than a declining drug market.
Laundering drug profits
Estimates suggest that well over half of the gross profits generated by the drug
trade are channeled into money laundering.
In the late 1980s, the Financial Action Task Force (FATF) assumed that between
two thirds and 70 percent of drug money was laundered. The FATF study, one
of the first to make such an estimate, based its figures on interviews with
experts in the field.
The UNODC study also suggested that the figure varied according to location.
Overall, the proportion of gross profits available for laundering at the
wholesale level ranged from 87 to 94 percent, and at the retail level from 32 to
50 percent, between sub-regions.
Drug traffickers spend their profits in a variety of ways — from buying luxury
items such as yachts and jewelry, to investing in real estate and using offshore
financial centers. Some traffickers use laundering networks embedded into
their overall organizational structure and directly employ accountants and
lawyers; other groups outsource to “independent” networks that specialize in
hiding the proceeds of crime. With the slow decline of hierarchical crime
organizations and the emergence of loose hierarchical or networked structures,
the trend is moving towards professional outsourcing.
The economic impact of drug money
The flow of drug money from the hands of traffickers, through launderers, and
finally into the licit economy, has all sorts of complex socioeconomic effects. In
the short term, an inflow of drug money back into the economy can boost
investment and local GDP, generating employment and revenue. The long-term
effects, however, tend to be negative, particularly when drug-related proceeds
comprise a relatively larger portion of the total economy of a community or a
country. In this scenario, drug money has the potential to inflate property
prices, distort export figures, create unfair competition, reinforce skewed
income and wealth distributions and increase corruption. In the process,
legitimate businesses, without access to illicit funds, may be squeezed out of
the market, and new legitimate investments may not take place. The rise of an
illicit economy helps to weaken the rule of law and facilitates corruption, which
in turn reinforces the vicious economic cycle.
Studies suggest that the flow of laundered money, including drug proceeds,
back into the domestic economy is associated with reductions in overall annual
economic growth rates, 72 particularly in smaller and less developed countries.
One estimate, based on a study of 17 OECD countries, suggested that a $1
billion increase in money laundering can reduce overall economic growth by
between 0.03 and 0.06 percentage points.
Possible solutions
Decriminalization of drugs
The artificially high profits of the illicit drug market provide a great incentive for
drug cartels, which lead to gang wars and crime in order to gain or retain a
share of the black market for drugs. For this reason countries, and even sub
national territories and cities have expressed a desire for decriminalization in
the past. These countries emphasize on the rehabilitation of the offenders and
the promotion of drug-related education and awareness campaigns rather than
prosecution. As such, they hope to spend fewer resources on tracking down
criminals and incarcerating them, by concentrating instead on public health
and education initiatives, which would be tackling the roots of the problem.
Decriminalization of drugs could be achieved by subjecting the production,
trade and consumption of drugs to international regulations, which would
mean that certain limits and conditions would be imposed and monitored.
Rehabilitation
Countries could provide rehabilitation to drug users and prevent the
consumption of drugs by strengthening their systems of public health and
social services. By ensuring that treatment is widely accessible, these countries
would be able to undermine the illicit drug market and reduce the negative
effects that widespread drug abuse causes on society. Another measure which
will prove useful is the provision of psychological treatment to abusers in order
to tackle to the underlying reasons for their addiction.
Education and Employment
By ensuring a proper education and a good work environment, states can
ensure that people pursue other activities than drug cultivation. Training,
internships and vocational skills can be offered to the young, unemployed or
rehabilitated. Better education will also prove necessary to prevent the rise in
the number of drug users, by making people understand the consequences of
drug abuse and hence limit the demand for drugs. Education initiatives
concerning drugs can be reinforced, along with the spreading the knowledge of
the dangers of sharing hypodermic needles.
Search and Destroy
One can’t have drugs if no one produces it. Instead of promoting strategies to alter
the legal status of drugs, or change the incentives of its producers, there is always the
ever so slightly more confrontational way. A United Nations anti-drug task force could
go in and slash and burn drugs fields, raid container ships trafficking the drugs, or
even assault overland drug caravans. Maybe a harsh international law could be
enacted where all drug producers worldwide will fall under the same laws. UN Special
Forces could quickly descend and dispatch drug cartels in Mexico, Afghanistan and
Myanmar, putting an end to middle men, and/or producers.
Another measure, which could be used to limit the international drug trade, would be
stricter border controls in order to prevent the transit of drugs and its components to
other states, thus reducing the supply of drugs. Cooperation among neighbor states
to achieve stricter border controls is necessary and Interpol may be able to play an
important role in coordinating the different states’ forces.
Alternative Development
Alternative development initiatives work on the assumption that reductions in opium
and coca cultivation are conditional upon the general social and economic
development of source areas and their integration into the nation state. As such the
elimination of drug crop cultivation is often a positive externality of the process of
enhancing food security, increasing household incomes and an improvement in the
quality of life. Alternative development via the introduction of substitute crops and
diversified cropping patterns has disproved the myth that coca and opium offer the
highest returns to small farmers. Substitution efforts in Northern Thailand have
illustrated that annual profits per square meter can be increased by over 50 times by
replacing opium with flowers. In the Chapare rubber has been found to accrue four
times that of coca per hectare. In Buner, Pakistan household incomes were more
than doubled through development efforts between 1976 and 1991 whilst opium
cultivation had been all but eliminated since 1983. Moreover, Thailand's success in
reducing the level of opium production has proved what development efforts can
achieve where decades of coercion have failed. Current levels of production are half
that produced in 1984 and only a quarter of that produced in the mid 1960's.
Consequently, Thailand's programme is considered as one of the most effective in the
world.
Major parties involved
United States The effects of the illegal drug trade in the United States can be seen in a range
of political, economic and social aspects. Increasing drug related violence can
be tied to the racial tension that arose during the late 20th century along with
the political upheaval prevalent throughout the 1960s and 70s. The second half
of the 20th century was a period when increased wealth, and increased
discretionary spending, increased the demand for illicit drugs in certain areas of
the United States. Large-scale drug trafficking is one of the few capital crimes,
and may result in a death sentence prescribed at the federal level.
Although narcotics are illegal in the US, they have become integrated into the
nation's culture and are seen as a recreational activity by sections of the
population. Most of the U.S. imports of drugs come from Mexican drug cartels.
Mexico Corruption in Mexico has contributed to the domination of Mexican cartels in
the illicit drug trade. Since the beginning of the 20th century, Mexico's political
environment allowed the growth of drug-related activity. The loose regulation
over the transportation of illegal drugs and the failure to prosecute known drug
traffickers and gangs increased the growth of the drug industry. Toleration of
drug trafficking has undermined the authority of the Mexican government and
has decreased the power of law enforcement officers in regulation over such
activities. These policies of tolerance fostered the growing power of drug
cartels in the Mexican economy and have made drug traders wealthier. Over
the past few decades drug cartels have become integrated into Mexico's
economy.
Mexico is widely known as one of the countries where drug abuse is relatively
high, but when the government realized that black market and the drug cartels
had been causing a substantial destruction where they led to a great number of
deaths, they decided to decriminalize many drugs in 2009 and a lot of these
legalized drugs are deemed to be from the hard ones, including heroin and
cocaine. The government has done so, hoping that the decriminalization would
help in making Mexico a safer place.
Colombia
Colombia has had a significant role in the illegal drug trade in Latin America.
While active in the drug trade since the 1930s, Colombia's role in the drug
trade did not truly become dominant until the 1970s. When Mexico eradicated
marijuana plantations, demand stayed the same. Colombia met much of the
demand by growing more marijuana. Grown in the strategic northeast region of
Colombia, marijuana soon became the leading cash crop in Colombia. This
success was short-lived due to anti-marijuana campaigns that were enforced by
the US military throughout the Caribbean.
China
China has a long history of illicit drug use. Opium was first trafficked into China
by ancient Arabians in early 700 BC. The number of drug addicts exceeded 20
million in 1949 when the new China was founded. Following the launching of
an extensive anti-drug campaign in the early 1950s, the Chinese government
news agency announced in 1953 that drug abuse was completely eliminated
from the mainland, which led China to be considered a drug-free country for
the next thirty years. Drug use re-emerged in China as it adopted economic
reforms and an open door policy to the outside in 1980s. The drug trafficking
activities were carried out mainly through the route from the Golden Triangle
region
China had the third largest heroin seizures in the world and the largest cocaine
seizures in Asia in 2006. According to the China Ministry of Public Security, the
number of registered drug users increased from 70,000 in 1990 to 1.16 million
in 2005; however, the estimated number is believed to be higher. The majority
of drug users use heroin. Most of them are young, have little education and do
not have stable employment.
Bibliography
https://wdr.unodc.org/wdr2019/prelaunch/WDR19_Booklet_1_EXECUTIVE_SUMMARY.pdf
https://link.springer.com/content/pdf/10.1186/1477-7517-7-4.pdf
https://www.unodc.org/pdf/Alternative%20Development/AD_BulletinNarcotics.pdf
https://www.washingtontimes.com/news/2009/apr/26/solutions-nadleman-piper-decriminalizing-
marijuana/
https://www.ncjrs.gov/ondcppubs/publications/policy/99ndcs/iv-g.html
https://www.unodc.org/wdr2017/field/Booklet_5_NEXUS.pdf