sept 2014_final(2)

September 2014Volume 11, Issue 3

Editorial note IN THIS ISSUE

The ECPR Standing Group on Organ-ised Crime had the pleasure of par-

ticipating, once more, in the ECPR’sannual conference. The Section pro-posed by the Standing Group on “Under-standing and Tackling the Roots ofInsecurity: terrorism,transnational organizedcrime and corruption”was among the best at-tended and was charac-terized by a very highstandard of presentationsand discussion. The Sec-tion, which was ourlargest so far with 65 participants, wascomposed of 9 panels, covering a largerange of security topics interconnectedwith organized crime. We are very grate-ful for everyone’s participation and en-gagement!

In continuation of our efforts towards re-search and information on topics re-

lated to organised crime, this newsletterproposes a number of contributions: Pro-fessor Nigel South on organised crimeand green criminology, Leo Lin on cross-

straits cooperation be-tween China and Taiwan,Prof. Bill Tupman and histop 5 list of terrorist organi-sations and Matteo Alber-tini on trends inpost-yugoslav organisedcrime.

After the articles, students from thesuccessful Intensive Summer School

on Organised Crime in Catania last sum-mer have shared some of their contribu-tions. Lastly, as usual, announcementsand calls for papers will follow in our mis-cellaneous section. Happy reading!

Coming back from the success of theECPR Conference in Glasgow

by FALKO A. ERNST and ANNA SERGI (Editors)Centre for Criminology, University of Essex

Thanks to allthe speakers inGlasgow and tothe audience!

Standing Group on Organised Crime Newsletter

ECPR General ConferenceMembers of the ECPRSGOC in Glasgosw

In this issueGreen Criminology and Organised

Environmental Crimeby Prof. Nigel South

Page 2

Cross-strait Cooperation in Fi-ghting Against Chinese OrganisedCrime

by Leo LinPage 4

Top 5 terrorist groups 2013 (model-led on Forbes Top 5 list of Businessgroups

by Prof. William (Bill) TupmanPage 6

Trends in Post-Yugoslav OrganisedCrime

by Matteo AlbertiniPage 8

Special Focus Summer SchoolOrganised Crime as an actor in

legal economy by Money Launderingby Dario Giancani

0

Special Focus Summer SchoolCorruption as Preface to Organi-

sed Crimeby Giuseppe Gabriele Finocchiaro,

Petra Ježová, Enrico Leotta, Petr Netuka,Malwina Walenda

Page 12

News & AnnouncementsPage 14

Nigel South is Professor of Socio-logy and Criminology at the Universityof Essex and has years of experiencein the field of critical criminology andenvironmental issues.

What’s the connection between orga-nised crime and the natural environment?Well, at one time, examining seriousmedia reporting or the research literaturewould have suggested ‘not much’. Howe-ver, in the past decade, that has beenchanging. In January this year, the NewYork Times ran a story headlined ‘A Mafialegacy taints the Earth in Southern Italy’(Yardley, 2014) covering the public healthand environmental implications of the bu-rial of tons of toxic waste by organisedcrime enterprises that were supposedly di-sposing of the waste safely. In the May2014 issue of this newsletter, McNulty de-scribed the impact of transnational organi-sed crime on Pacific Ocean fisheries, andin June 2014, UNICRI hosted a confe-rence on ‘The impact of organized crimeon the legal economy’ – with ‘environmen-tal crimes as sources of funding for orga-nized crime’ featuring among the maintopics. Of course, as Walters (2013: 282)notes, this kind of organised criminal acti-vity is not new. Writers such as Block andScarpetti (1985) documented U.S. mafiatake-overs and monopolisation of wastemanagement services in New York andNew Jersey in the 1970s and 1980s,based on tough elimination of industrycompetition, bribery of officials and under-cutting of prices by disposing of toxicwaste using illegal means. But althoughBlock (2002:61) has observed that ‘a newgeneration of environmentally minded re-formers’ was taking note of this as far backas the 1970s, it has taken some decadesfor environmental issues to climb up thepolicy and policing agendas.

Organised environmental crime

There is now growing acknowledge-ment of the damage caused by both legaland illegal domestic and transnational tra-des in environmental goods. Even wheretransactions are legal, serious ecologicaldamage can be caused with official appro-val, and if the terms or spirit of legal li-

cense are broken then corruption or fa-vours can help to support ‘business asusual’. Environmental commodities invol-ved would include, for example, illegallyharvested fish, timber or rare wildlife spe-cies or body parts (e.g. ivory, animal or-gans for certain traditional medicines) aswell as waste. In a world of over-produc-tion and hyper-consumption the resultingwaste poses the problem of how to di-spose of rubbish and commodities that arenow unwanted. Ruggiero and South(2010) have described the illegal servicesprovided in response as ‘dirty collar crime’.In the U.S., studies have shown how theinvolvement of organised crime reachesinto all aspects of the business, involvingcontrol of companies offering services forthe disposal of domestic and industrialwaste. Avoidance of licensing require-ments, the payment of bribes to dump siteowners or the outright ownership of suchland-sites are ways of expediting disposalcheaply though hazardously.

Walters (2013: 281) notes that Szasz(1986) argued such criminal enterpriseflourished as a result of ‘lax implementa-tion and enforcement’ of rules and law andthat today, this is ‘an insight pertinent tosouthern Italy’s procurement of waste con-tracts and lack of regulatory oversight’. In-deed this is a business that is familiarinternationally- both because it will operatein most or all advanced consumer econo-mies but also because it operates acrossborders, often transporting the most ‘un-

wanted’ – the most dangerous and themost legally prohibited – waste from pro-ducer and consumer nations to ‘victim’sites, for example in the developing world.Mandel (1999: 66) describes this as thebusiness of ‘deadly transfers’ of ‘unsan-ctioned hazardous materials’ - unwantedand frequently toxic waste moved from re-gulated spaces to sites where weak or noopposition will be encountered and fromdeveloped to developing nations as part ofa global industry. For Mandel, this occursin a ‘disorderly world’ which poses a num-ber of problems for the development andapplication of law relevant to the environ-ment. Transactions of this sort might re-quire organised smuggling and forgeddocumentation and involve operations thatoverlap with global routes and markets in-volving trafficking of other illegal goodsand smuggling of human and animal car-goes.

Challenges

This is a mixed arena of sometimes di-stinct, sometimes overlapping, small-scaleand larger-volume activities and actors.The trading and trafficking involved maywell be illegal yet hard to prevent and pe-nalise, or it may be ambiguous in terms ofjurisdiction or responsibility. Where regu-lation and prohibition do make an impactin terms of prevention or detection andprosecution, they may also (as with othercriminal markets) help to create the scar-city and rarity of certain commodities thatthen drive the demand for these goods(Hayman and Brack 2002: 7).

According to Elliott (2009: 65), whether‘opportunistic and informal’ or ‘increasinglysystematic, well-financed and highly orga-nized’, such transnational environmentalcrime ‘is one of the fastest growing areasof criminal activity, globally worth billionsof dollars’. However it is difficult to find ap-propriate and effective legal or civil reme-dies in the arena of environmental harmsand crimes and problems of inadequacyof arrangements and resources for enfor-cement of rules and laws are common-place. Organised forms of crime operatingas illegal enterprises, frequently with legalfronts, tend to avoid effective sanction anddisruption by means of intimidation,

Green Criminologyand Organised Environmental Crimes

by Nigel South

2 ECPR Standing Group on Organised CrimeSeptember 2014, Volume 11, Issue 3

Professor Nigel South

corruption and value to legitimate bu-siness as a way of ‘externalising crimino-genesis’ (Szasz, 1986: 23). And, ofcourse, their greatest strength lies in mee-ting demand where supply is restricteddue to externally imposed prohibitions orprotections or due to their own control oversupply.

Conclusion: A green perspective

Recent studies, covered by variousterms such as green, environmental, con-servation or eco-criminology (South, 2014;South and Brisman, 2013) have fused ele-ments of critical criminology and environ-mental awareness and produced a nowsubstantial body of work examining crimi-nological, legal, cultural and public healthconsequences of environmental crimesand harms. This perspective has rele-vance here because, as Walters (2013:281) argues, the ‘environment’ is big busi-ness for organised crime, noting estimatesfrom the United Nations Environment Pro-gramme that organised crime syndicatesearn between US$20-30 billion from envi-ronmental crimes and that the NGO, theEnvironmental Investigation Agency, con-curs – suggesting that ‘Environmentalcrime is currently one of the most profita-ble forms of criminal activity’ and that it istherefore ‘no surprise that organised cri-minal groups are attracted to its high profit

margins’.

An environmentally-aware criminologycan contribute to an interdisciplinary ap-proach to both public policy and environ-mental activism in ways that may help usformulate new conceptions of offendingand regulatory responses. There aremany fields of crime in which we need ‘joi-ned up thinking’ across national and tran-snational government andnon-government agencies but in terms ofglobal threats and intergenerational futuresignificance there can be few more impor-tant than the challenge of crimes that pol-lute and destroy our local environmentsand our shared planet.

References

Block, A (2002) ‘Environmental crimeand pollution: wasteful reflections’, SocialJustice, 29, 1-2.

Block, A and Scarpetti, F (1985) Poi-soning for Profit: The Mafia and toxicwaste in America,

New York: Wm. Morrow.Elliott, L (2009) ‘Combating transnatio-

nal environmental crime’ in K. Kanga-spunta and I. Haen Marshall (eds)Eco-Crime and Justice, Turin: UNICRI

Hayman, G. and Brack, D. (2002) In-ternational Environmental Crime: The Na-ture and Control of Environmental Black

Markets. London: Royal Institute of Inter-national Affairs.

Mandel, R. (1999) Deadly Transfersand the Global Playground: TransnationalSecurity Threats in a Disorderly World,Westport, Conn.: Praeger.

McNulty, J (2014) ‘Pacific Ocean fishe-ries and the opportunities for transnationalorganised crime’, ECPR Standing Groupon Organised Crime, May, 11, 2.

Ruggiero, V and South, N (2010)‘Green criminology and dirty-collar crime’Critical Criminology, 18, 4.

South, N (2014) ‘Green Criminology:reflections, connections, horizons’, Inter-national Journal for Crime, Justice and So-cial Democracy, 3, 2.

South, N and Brisman, A (eds) (2013)The Routledge International Handbook ofGreen Criminology, London: Routledge

Szasz, A (1986) ‘Corporations, organi-sed crime and the disposal of hazardouswaste’, Criminology, 24, 1.

Walters, R (2013) ‘Eco mafia and en-vironmental crime’ in K. Carrington, M.Ball, E. O’Brien and J. Tauri (eds) Crime,Justice and Social Democracy: Internatio-nal Perspectives, Basingstoke: Palgrave.

Yardley, J (2014) ‘A mafia legacy taintsthe earth in southern Italy’, New YorkTimes, January 29th.

3ECPR Standing Group on Organised CrimeSeptember 2014, Volume 11, Issue 3

THE ECPR SGOCSteering Committee 2012-2017

Convenor: Felia Allum,

University of BathCo-convenor:

Francesca Longo, University of Catania

Social Media Officer: Bill Tupman, University of Exeter,

Anglia Ruskin UniversityFunding Officer:

Daniela IrreraUniversity of Catania

Events & Publication Officer:Helena Carrapico, Aston University

Strategic Communication:Panos Kostakos, University of Bath

Newsletter Editors:Anna Sergi & Falko Ernst

University of EssexEuropean Review of Organised Crime

Felia Allum, University of BathAnita Lavorgna,

University of WolverhamptonYuliya Zabyelina,

John Jay College of Criminal Justice,CUNY

MemberGiap Parini

University of Calabria

Who is Who

Source: http://www.theepochtimes.com/n3/346967-environmental-crimes-cost-the-world-billions/


Cross-strait Cooperation in Fightingagainst Chinese Organised Crime

Leo Lin is a senior law enforcementofficer and professional interpreter inTaiwan. He specializes in transnationalorganized crime issues and police/ju-dicial cooperation in East and Southe-ast Asian region.

Fighting organized crime (OC) withjoint efforts has already become a preva-lent practice among different regions ofthe world. However, if politics becamethe major stumbling blocks for the mutualcooperation to combat OC, and thatwould be interesting to see how this se-curity issue can be addressed. In Asia,People’s Republic of China (PRC) andRepublic of China (ROC or Taiwan) areperhaps the two most peculiar stateswhose bilateral relations are way toocomplex to explain in any lengthy articles.Over the decades, contentions about thehistory and national identities alwayscome into play on both sides, and conse-quently, they see each other as potentialenemies. This has largely thwarted thecooperation in many aspects betweenthem.

However, no matter how strugglingthey are, they have to face the same chal-lenges, as other nations do: transnationalthreats. Since the 1990s, the dynamics ofglobalization has dramatically changedthe socio-economic and security environ-ment in East and Southeast Asia. The se-curity threats, such as terrorism, territorialconflicts, possible warfare in the KoreanPeninsula and Taiwan Strait, the prolife-ration of weapons and nuclear armamentand transnational organized crime, haveexisted in the region for decades or evencenturies, and the irresistible wave of glo-balization has transformed them massi-vely. Among them, OC is one of the mostdevastating security threats. Over thepast decades, many Asian countries,PRC in particular, have enjoyed the eco-nomic booms. According to UNODC, theAsian countries’ growth in internationaltrade has grown 527 times from 8.3 billiondollars in 1948 to 4,353 billion dollars in2008 (i). Following this tremendous eco-nomic upgrades, the “illicit economy” hasalso boosted tremendously. This givesOC groups a great environment to grow.

In other words, globalization has helpedtransform OC in terms of the criminal ac-tivities, the people and groups involved,and the capacities to conduct their illegalbusinesses across the borders in the re-gion.

Faced with this inevitable challenge,both side of the Taiwan Strait must do so-mething, putting aside their political andideological differences. One of the practi-cal ways to look at the OC problem andto cooperate with each other is to per-ceive OC as their common enemy, or, acommon security threat. Given that theOC has yet to become a direct threat tonational security to PRC and Taiwan, it’dbe down-to-earth to see it as a non-tradi-tional security (NTS) issue. THE ChineseArt of War master Sun Tzu says, “Knowyour enemy and know yourself, and youcan fight a hundred battles without de-feat.” From the scope of NTS, there areseveral key viewpoints on OC, from whichwe can know better about it: First, spea-king about the reference object, sinceNTS considers OC groups as non-stateactors, hence OC can be seen as an ob-ject in security issue. Secondly, regardingthe values, the threat posed by OC notonly harms the cross-strait and societalinterests, but also the national ones. Thir-dly, concerning the source of threat, OCposts challenges on a state both from in-

ternal and external source. Fourthly, interms of means, NTS stress on gover-nmental and instrumental cooperation asmeans to gain security, because OC pro-blem cannot be solved by a single state.Lastly, as to the roles of state and non-state actors, NTS recognizes non-stateactor as an important player, so the tran-snational OC groups can be recognizedas “illicit” non-state actors gaining the il-legitimate profits.

Now, if both sides of the Taiwan Straitsee OC as a common NTS threat, thenwhere is their common target? Probablythe most serious NTS threat is ChineseOC, which is considered by both sides asan obvious common target. When welook at the Chinese OC, two things mustbe identified: who they are and what theydo. In terms of who they are, both sideshave to realize which OC groups woulddamage their security. Two ways to deter-mine this: the first one is to look into the“traditional” OC groups in the region. Per-haps the most prominent groups are theChinese Triads. This term is not belong toany single syndicate, but is a generalname for the OC groups which has exi-sted in Chinese underground society forcenturies. The UN and US has identifiedat least five Chinese OC groups in PRCand Hong Kong: the Liu Yong, the ZhangWei, and the Liang Xiao Min, The FukChing and The Tung On syndicate. In Tai-wan, The nearly 60-year-old BambooUnion is the largest in the country, follo-wed by the Four Seas Gang and the Tien-daomeng. The all have solid roots in localsociety and run their own illicit busines-ses, sometimes cooperate with OCgroups in PRC, Hong Kong and Japan.The second one is to look into any OCgroups in which the gang members worktogether “temporarily” for gaining short-term profits. The size of this type of Chi-nese OC group is much smaller, andmost of them do not have a name forthemselves. Notwithstanding, with thehelp of modern technology, they can nowoperate transnational dirty jobs easily,and the national revenue is of coursehampered by them.

Leo Lin

by Leo Lin

5ECPR Standing Group on Organised CrimeSeptember 2014 Volume 11, Issue 3

Concerning what they do, the Chi-nese OC groups take advantage of theproximity, the insufficient rule of law andpoorer economy of the neighboring Sou-theast countries, and run their cross-bor-der illicit businesses with more ease.Some of their major activities are listed asthe following: The first is human traffickingand smuggling, a modern type of slavery.It is one of the major concerns for mostSoutheast Asian countries. The second isdrug trafficking. East and Southeast Asiahas been had the problems of drug pro-duction and distributions which affectedthe health security and human security toa large extent. The third is trafficking insmall arms and light weapons. This hassomething to do with the small arms pro-liferation problems because of ethnic, cul-tural and political diversity, andemergence of major organized crime. Thefourth activity is counterfeit goods/phar-maceuticals. PRC, in particular, hasgrown rapidly as the world’s workshop,and according to World Customs Organi-zation data, in recent years around twothirds of counterfeits discovered wor-ldwide were shipped from PRC. Finally,the telecommunication frauds have be-come a new profitable business in the re-gion.

With the advancement of technology,Chinese OC groups now make use of the

computer/ smart phone apps, such asLINE, WeChat, Skype, Weibo, along withother telecommunication tools such asVOIP(voice over IP), to establish call cen-ters and scam people in the region. Mil-lions of US dollars have been lost withinthe past years. Surprisingly, their basescan be found all over the East and Sou-theast Asia countries.

Recognizing the Chinese OC as acommon threat and the necessity to workhand-in-hand, PRC and Taiwan thereforereached a consensus and signed the“Cross-Strait Joint Crime Combat andMutual Legal Assistance Agreement” in2009. Both Taiwanese and Chinese po-lice forces implemented the Agreementand established direct cooperation me-chanisms. Since then, many Chinese OCgroups have been busted as a result ofthe cross-strait intensive joint operations.Taking example of the transnational fraudcrimes involving Chinese OC groups, inTaiwan only, the annual average fiscalloss due to fraud amounts was more thanNT$10 billion from 2005 to 2009. Howe-ver, after three years of cooperationacross the Strait, the fraud fiscal lossamount dropped to NT$4.98 billion in2001 (ii).

To conclude, with the globalizationprocess, the Chinese OC is no longer li-

mited within borders. On the contrary, ithas spilled over across the boundaries ofthe countries in the region, and becomemore transnational per se. In the past,both PRC and Taiwan addressed thisissue separately, owing to the political im-pediment as well as the different percep-tions about the security threat. However,the global trend has transformed the Chi-nese OC modus operandi and it has be-come a major NTS issue that both side ofthe strait can do nothing but to face it andreally work hand-in-hand. It turned outthat the Chinese OC has been perceivedas their common enemy. Bearing this inmind, the Cross-strait started to institutio-nalize their joint efforts which led to the si-gning of the agreement, which hasyielded a fruitful outcome. This type ofcooperation has indeed become a newmodel of mutual cooperation in fightingagainst Chinese OC in East and Southe-ast Asian region.

Endnotes:

(i) World Drug Report, 2010, Uni-ted Nations Office on Drugs and Crime.

(ii) Mainland Affairs Council, June2012www.mac.gov.tw/public/Data/2101911582271.pdf

Source: http://www.informationdissemination.net/2011/07/talking-taiwan.html

William Tupman (Bill) is VisitingProfessor in Criminal Justice at BPPUniversity, London; Research Fellow,Department of Criminology at AngliaRuskin University, Cambridge; Hono-rary Fellow and retired academic, De-partment of Politics University ofExeter.

Recently I was arm-twisted into produ-cing a list of the top five terrorist groups ac-cording to their wealth and financialarrangements. This was for the CanadianBroadcasting Company’s “Day 6” pro-gramme on Saturday 5 October 2013. Thelist I produced has certain definitional pro-blems: some would call the groups I’ve li-sted “insurgents” rather than “terrorists”,and some would call them “freedom fi-ghters”. But this is par for the course in anydiscussion of “terrorism”, which like “orga-nised crime” is a concept with over 100competing definitions.

The interview for CBC concentratedmy mind on just how far we can now esti-mate income and expenditure for typicalgroups and how far we have a clear ideaof what the variables are that need costing.The present account is an attempt to bringout the thinking behind what was originallya tongue-in-cheek piece preparatory toproducing a longer academic article.

To answer the Day 6 producer’s que-stions, I googled a number of recent arti-cles, and discovered that “terroristaccountants” now seem to be firmly in thepicture. Since al Qaeda was allegedly de-frauded of $10 million in the Sudan, “alQaeda Central” has demanded regular ac-counts from groups that carry the al Qaeda“brand”. Its accountants also estimate thewealth of citizens in areas under alQaeda’s control and levy a tax of around2% on overall annual wealth and profits onindividual deals in order to fund the opera-tion. These methods have been identifiedin Somalia and Afghanistan and may be inplace in the Yemen and North Africa. TheMaghreb leadership has been criticised bythe central organisation for failing to submitregular accounts, so unfortunately I can’tbe certain what system is in place in Maliand along the Libyan border.

We have figures from Osama binLaden himself as to his costs. He has beenquoted as saying it cost $1,500 per year tokeep an armed activist in the field in Che-chnya and from $200,000 to $300,000 per

week to keep his Iraqi franchise going in2004. That suggests a possible continuumbetween insurgencies composed of volun-teers and insurgencies where people arepaid to fight. Some insurgencies may be amix of zealots and mercenaries. In 1990 Icalculated a figure 0f £20,000 a year forfully underground IRA members based onthe British mainland, and £10,000 a yearfor those based in Northern Ireland. Thecosts of maintaining an underground pa-ramilitary in an urban environment will behigher than those for a rural insurgent in aless developed country.

There are two ways of estimating fi-nance for a paramilitary organisation. Oneis by taking the estimated number of mili-tants in the field and working out whateach one costs, plus overheads, so ananalyst can start by working from the fun-draising target. The other is to look at thefund-raising activities the organisation isknown to engage in and work out whattheir income must be. In an ideal world, wecould do both and then produce a busi-ness statement from which to draw conclu-sions about the viability of theorganisation.

The top three in the list that follows aremore “brands” than individual groups, al-though the same can probably be said formost insurgent, paramilitary or terroristgroups. The cellular nature of individualparamilitary operations is paralleled by theequally cellular nature of financial structu-res. An overseas-based leadership in exilewill use different funding structures fromthose of regional and local groups. Butnow that the larger networks have introdu-

ced stricter accountancy practices theyhave become more centralised, makingthem more vulnerable to intelligence agen-cies.

So who are my top five?There were a number of competing

candidates for fifth place: FARC in Colom-bia, ETA in Spain, Shining Path in Peru,the Naxalites in India, the remnants of theTamil Tigers, the IRA dissidents, the insur-gent groups in Burma and several Africangroups. All are in flux at present, so I chosethe PKK as an example of this group.

5. The PKK

Europol’s 2011 Terrorist Situation Re-port says the PKK raised significantamounts of funding in Europe for its activi-ties in Turkey. Among its methods are drugsmuggling, people trafficking, extortion,members’ contributions, credit card skim-ming and fraud. State support, particularlyfrom Syria, has declined and funding fromthe Kurdish diaspora has increased. Fun-ding is down from an estimated $200–500million per annum during the 1990s to$50–100 million today. The Turkish gover-nment estimates a much higher $615–700million, but most non-Turkish commenta-tors consider this to be exaggerated. Di-screpancies in estimates derive fromperception of the drug trafficking business.The higher estimates attribute all profitsfrom drug trafficking to the group, the lowerones assume that drug traffickers simplypay a percentage of profits to the group, inthe manner of other Kurdish businesses.

4. Hezbollah

It is disputed whether we are correct tocall Hezbollah “terrorist”. It has status as alegal political party in the Lebanon. Howe-ver, in July 2012 the EU designated its mi-litary wing a terrorist organisation andadded it to its blacklist. The US, France,Australia, Canada, Israel, Bahrain, the GulfCooperation Council and the Netherlandshave designated the whole organisation asterrorist. The Sunni Arab world sees it asan agent of Iran and would like to reduceits influence.

The total membership of the armedwing is also a matter of dispute. A low esti-mate puts it at 1,000 fully trained regulars,backed up by 6–10,000 volunteers; a high,

Top 5 terrorist groups 2013 (modelled on ForbesTop 5 list of business groups)

William Tupman

by William Tupman


Iranian, estimate puts it at 65,000 “fi-ghters”. Hezbollah has its own missilesand other high-tech weaponry.

Funding comes from donations fromthe Lebanese Shia community, from Iran(estimates vary between $60 million and$200 million), from Syria and from smug-gling networks in, of all places, South Ame-rica. The extent of this South Americanconnection may be exaggerated. It is notclear that individual Lebanese involved incriminal activities are necessarily workingfor Hezbollah rather than for themselves.

3. Syrian jihadists

An IHS/Janes study has estimated thatthere are 100,000 fighters in the field inSyria, and maybe 1,000 different groups.Of these, 10,000 are linked to al Qaeda, inparticular Jabhat al Nusra and the IslamicState in Iraq and the Levant. Another 30–75,000 are hard-line Islamists but focusedon Syria. A further 30,000 are moderateIslamists.

These groups are considered to havetaken control of income-generating resour-ces in northern Syria, such as oil, gas andgrain, but their funding comes primarilyfrom Middle Eastern states and private in-dividuals. If we take Osama bin Laden’slow figure of $1,500 per fighter and as-sume a figure of 70,000 fighters, then $105million per year is a minimum requirementand almost certainly far too low, given thatthis is a more hi-tech conflict than Che-chnya’s and more tribal groupings needpaying off in order to join the insurgency.

Unfortunately, there is a considerableoverlap between this category and thenext one, the al Qaeda brands, which rai-ses the question as to whether it is time to“de-brand” before preparing the next listand work out individual financial figures forindividual groups.

2. The al Qaeda brands

Funding for al Qaeda has long been amatter for debate. During the organisa-tion’s time in the Sudan it was alleged tobe raising astronomical sums, but thoseevaporated under closer scrutiny. Osamabin Laden’s personal fortune had been fro-zen by Saudi authorities and many of thecompanies he was alleged to have ownedwere sanctions-busting devices run on be-half of the Sudanese authorities. He clai-med to have made an overall loss inexcess of $100 million during his time inthe Sudan. In Afghanistan, with the Tali-ban, the main source of revenue was pro-bably individual donations from wealthydonors in the Gulf, and the sum total wasprobably about $30 million annually.

“Al Qaeda central”

The leadership based in Afghanistan,North Waziristan and Pakistan consume aproportion of the donations in living expen-ses, and the money left over has frequen-tly been used for seed funding for variousorganisation from Indonesia and Cambo-dia to Mali. These organisations are thenexpected to become self-funding.

Al Qaeda in the Islamic Maghreb, until2007 the Salafist Group for Preaching andCombat (GSPC), is linked to Libyan andTunisian groups, in particular Ansar al-Sharia Libya. It may also be linked to alShabab in Somalia and Boko Haram in Ni-geria. A significant proportionof the Ma-ghreb group’sfunding hascome from kid-napping forransom.

Al Qaedain Iraq

By late2012, alQaeda was al-leged to have2,500 mem-bers in Iraq,(now known asthe IslamicState of Iraqand the Levant– ISIL, someti-mes ISIS), butwas probablymore active inSyria.

Al Qaedain the ArabianPeninsula

Here theorganisation was relatively small in num-bers – somewhere between 50 and 200members – but was seen as potentially amajor threat. Al-Shabab al Muminin pre-sents a greater threat to the Yemeni gover-nment and is not yet under al Qaedacontrol.

1. The Taliban

The Taliban in Afghanistan

A 2011 UN report estimates that theTaliban has an annual income of $400 mil-lion. This comes from donations and taxeson the local economy – 10% on the har-vest and 2.5 % on personal wealth. Othersources are contributions from private do-nors in the Gulf states, extortion from drugdealers, construction, mining, cell phone

operators and aid projects. These allamount to about $275 million, the UN re-port estimates. Opium is primarily impor-tant for the local insurgencies in Helmand,Kandahar and Urzugan and raises about$100 million, a very small proportion of theestimated value of the drug trade of $3.6–4 billion. The ISAF estimates about $100–155 million is spent on paramilitaryoperations and the rest on maintaining theinsurgency.

The Taliban in Pakistan

Again, drugs are no longer seen as themain source of funding. Estimates are at

about $200 million. Donations are impor-tant, but counterfeit brands of cigarettesprobably supply 20% of the funding. Kid-nap, extortion, rackets and bank robberiesalso bring in money, as do illegal logging,marble mining and emerald mining. Thetotal income from these is about $400 mil-lion.

I placed the Taliban at the top of my liston the basis that hard-sourced estimatesexist. Further work is obviously required toproduce a more sophisticated accountingmethod that takes into account the me-thods these groups use themselves. Re-peating the exercise annually will take uscloser to the truth.


Source: http://news.bbc.co.uk/1/hi/world/south_asia/8046577.stm

Dr. Matteo Albertini is a Balkanaly-sis.com correspondent based in Milan,covering the Western Balkans and theregion’s relationships with Italy. Atpresent, he lectures on Semiotics, Po-litics and Culture at the Alma MaterStudiorum University of Bologna.

Introduction: Background Context

Over the past twenty years, Balkanorganised crime has frequently featuredin international newspapers, and has be-come a growing concern for internationalsecurity forces. These criminal groups lar-gely originated during the Yugoslav warsof secession; by exploiting these conflictsand the rampant corruption that charac-terised the infamous post-Communist‘transition’ period, these groups grew lar-ger and stronger.

The development of weak states (dueto conflict and the events of this transitionperiod) played the crucial role in fosteringan environment conducive to organisedcrime, as has been manifested by wide-spread corruption, money-laundering andwhite-collar crime.

Nevertheless, reducing the phenome-non to the sphere of politics would be anoversimplification; rather, Balkan organi-sed crime has always flourished in themurky world of the grey economy, at thelevel of society in which criminality mani-fests itself in everyday life, influencing itand sometimes taking control of a widespectrum of activities normally conside-red ‘lawful.’

Furthermore, Balkan criminal organi-zations were able to quickly convert thelogistical routes used for arms and goodstrafficking during the wars into efficientchannels to supply drug dealers andothers on the wider European level. Du-ring the 1990s, they also began to serveas money-launderers for their own andothers’ income. Balkan criminal groupswere thus able to make alliances withother entities operating far from the regionitself. For example, a ‘Holy Alliance’ (onlypartially dismantled with the operationBalkan Warriors in 2009) uncovered thelinks between drug cartels in South Ame-rica and established mafia organisationslike the Calabrian 'Ndrangheta; the police

operation revealed the faciltatory role ofBalkan organised crime groups withthese two distant entities.

The activity of Balkan crime groupsacross European Union borders also con-stitutes a major potential threat to EU se-curity and thus a serious problem in forBalkan governments seeking EU mem-bership.

Evolution of Post-Yugoslav Crimi-nal Groups

While significant organised crime ac-tivity has long existed in Balkan EU mem-bers both new (Croatia, Romania,Bulgaria) and old (Greece), the presentanalysis will focus on criminal groups inthe former Yugoslavia, leaving aside theequally important Albanian mafia. In anycase, such nomenclature may just be amatter of convenience since both groupsare now moving the fulcrum of their acti-vities across borders, with significantcrossover activity in countries like Monte-negro and Kosovo.

Today, three different generations oforganised crime figures in the former Yu-goslavia can be distinguished. The firstone consisted mainly of common crimi-nals who became soldiers and paramili-tary leaders during the 1990’s wars.

The second generation, essentially aregrouping of the survivors of the Croatiaand Bosnia campaigns, developed mainlyin Serbia and Montenegro during the1999 Kosovo conflict, and benefittedgreatly from the imposition of international

sanctions against the Federal Yugoslaviaduring the preceding years. These groupsderived their names from the particularBelgrade suburbs in which they werestrongest: Surcin, Vozdovac, and Zemun,among the most famous. The ‘ZemunClan’ became the most powerful of allunder the rule of Dušan Spašojevic. In themeanwhile, changing political balancesmeant that many people in the gover-nment and military found their servicesextremely useful.

This phase lasted from 1999 to atleast 2003, when Serbian Prime MinisterDjindjic was assassinated by Zvezdan Jo-vanović. He had been a member of theRed Berets special unit, headed by thecriminal, former French Legionnare andSerbian paramilitary, Milorad Ulemek(more commonly known according to hisnom de guerre, Legija). The Serbian sta-te’s strong police reaction led to the arrestof Legija and the dismantlement of theRed Berets. Spasojevic died in a gunfighton 27 March 2003.

The third generation of post-Yugoslavorganised crime soon emerged. The insti-tutional stabilisation of Balkan states inthe following years gave authorities morefreedom to investigate the endemic rela-tionships between politics, finance and or-ganised crime. To survive, criminalgroups followed the example of the Italianmafias, and chose to ‘disappear’ in thesociety, changing both the shape and thecostumes of organised crime.

The third generation of post-Yugoslavorganised crime soon emerged. The insti-tutional stabilisation of Balkan states inthe following years gave authorities morefreedom to investigate the endemic rela-tionships between politics, finance and or-ganised crime. To survive, criminalgroups followed the example of the Italianmafias, and chose to ‘disappear’ in thesociety, changing both the shape and thecostumes of organised crime.

A New Convergence: Crime andBusiness

During all this transformation, some“hybrid” figures emerged: businessmenwho acted as middlemen between properorganised crime groups and the official

Trends in Post-Yugoslav Organised Crime

by Matteo Albertini

Matteo Albertini

8 ECPR Standing Group on Organised CrimSeptember 2014, Volume 11, Issue3

economy. Some of them were even-tually investigated: Stanko “Cane” Subo-tic, alleged to be the king of cigarettesmuggling from his base in Geneva wasrecently acquitted. And Miroslav Mišković,owner of the major firm Delta Holding andSerbia’s second-richest man, was detai-ned in December 2012 over an inquiryinto a privatisation. He has been suspec-ted of having laundered more than 100million euros for the Zemun Clan.

Mišković has also had involvement inBosnia-Herzegovina, where he supportedMilorad Dodik's political campaigns whilealso becoming involved with the currentcandidate for the Bosnjak seat at BosnianPresidency, Fahrudin Radončić. Owner ofthe Avaz company, Radončić ‘s candidacywas damaged when a Sarajevan daily,Oslobodjenje, made public his allegedpast business relations with drug lordNaser Kelmendi, arrested in Pristina inMarch 2013. Kelmendi was reportedly thehead of one of the region’s best-organisedcriminal cartels, allegedly smugglingdrugs and cigarettes, trafficking in peopleand laundering money. These practicesgained him some infamy in 2012, whenUS President Obama designated him asa narcotics trafficker under the 1999 Kin-gpin Act. Kelmendi had managed the San-dzak route connecting Kosovo andBosnia-Herzegovina, through a narrowcorridor straddling the Serbian – Monte-negrinian border. Much international secu-rity research has also focussed on thisregion due to the presence of radical Isla-mists there.

The heir of the Zemun Clan in Serbia,Darko Šaric, was born not far from thisborder, in the northern Montenegrin townof Pljevlja. Under his rule and that of so-metime lieutenant Rodoljub Radulović, theClan made an alliance with Colombianmafias and made use of 'Ndrangheta'sprotection and logistic support, directly im-porting drugs from South America into Eu-rope.

After several years of smooth sailingover the middle of the last decade, theabove-mentioned operation Balkan War-rior inaugurated a new stage in counter-organised crime actions, boosted by thewill of the new political leaderships to getcredit in the eyes of the European Union.Last March, Darko Šaric surrendered toSerbian police, a move which clearly un-derlined the end of previously-existing po-litical protection. Heads rolled also at highlevels of the Serbian government. Radu-lović is still at large, but was reported tohave begun a negotiation with the policeto give himself up.

A final and intriguing aspect of thepost-Yugoslav crime groups is the versa-tility and sophistication of groups like the

Pink Panthers, a criminal group able to acton an international level, and famous foraccomplishing daring and dramatic high-level robberies: these total over $250 mil-lion in robberies conducted in Dubai,Switzerland, Japan, France, Germany, Lu-xembourg, Spain and Monaco. No longerdoes one speak of the Balkan crimegangs simply in terms of drug smugglersand arms dealers; groups like the PinkPanthers are directly in contact with the'upper crust' of buyers and banks requiredto carry out the anonymous and risk-freeresale of valuable and desireable commo-dities.

Conclusions

This current dynamic of post-Yugoslavmafias, made more unpredictable by theunsettled outcome of recent arrests, lea-ves room for the emergence of a new ge-neration of leaders, which will affect thecourse of criminal activity in future. Conti-nued instability in North Africa and theMiddle East will also present an opportu-nity for Balkan gangs to exploit new trafficfrom conflict zones.

As was strongly underlined by recentpolice inquiries, most organised crimegroups in the Balkans are now movingtheir local operations to Kosovo and Mon-tenegro, where the bonds between politi-cal power, economic system andorganised crime are still strong. However,all of these countries see the EU as theirfinal future destine.

Although it seems to have comprehen-ded the threat of transnational organisedcrime relatively late and only in part, theUnion has indeed defined some usefulbases for tackling it, with the Lisbon Treatyand the Stockholm Program. Some Euro-pean countries already make use of a newcategory of analysts, investigators and po-litics experts in the mixed routes of orga-nised crime. These tend to be those witha tradition of organised crime, and thus an‘institutional memory,’ like Italy. But othercountries still lack tools and expertise re-quired for the task.

At the same time, we must not forgetthat fighting organised crime is not just amatter of chasing the ‘bad guys.’ It also re-quires a better understanding of the pla-ces in which criminal organisations areborn and grow, thus informing securityoperations with policies addressing civilsociety and public administration, and onlyindirectly the mafia. This strategy can beparticularly effective because organisedcrime has a vital need for bureaucrats, le-gitimate businessmen, IT experts, corrup-ted officials and so on, with links in thevery centre of the state system.

Nevertheless, the profile and points ofactivity of ‘third-generation’ Balkan crimefigures should be of no surprise. Analystsnow and in future will increasingly be pla-cing scrutiny on the big cities of WesternEurope (and further abroad), where thecrime bosses have their main bases- andsometimes work under the eyes of foreignautorities. The general globalisation of or-ganised crime means that bosses will na-turally interact with confreres on a widergeographical span, while these figures willcontinue to seek refuge abroad due to theoften more hostile atmosphere in mostBalkan countries, the governments ofwhich are showing a committment toBrussels by engaging in official crack-downs.

Finally, the pattern of criminal activitycurrently witnessed indicates that post-Yu-goslav crime groups will be increasinglyinvolved with ‘high-end’ luxury items, thuscreating new synergies with financial insti-tutions and ‘respectable’ foreign busines-smen. The diversification strategy of thesecrime groups, borne of necessity but alsoprofitability, remains a challenge for lawenforcement, especially considering theincreasing internationalisation of opera-tions.

Endnotes1. Names are known: amongst other,

Zeliko Raznjatovic aka Arkan and MiloradUlemek “Legija” in Serbia, Ramiz Delalićand Ismet Bajramovic (both surnamedCelo) in Bosnia, Ramush Haradinaj andHasim Thaci in Kosovo. Cruel warriorsand smart pirates, sometimes national he-roes, who profiteed from plundering,smuggling, the black market, drug andhuman trafficking across the renewed Bal-kan state borders. The war was, for themost part of them, the continuation of theircriminal action by other means.

2.http://www.b92.net/eng/news/poli-tics.php?yyyy=2013&mm=07&dd=23&nav_id=87040

3.http://www.balkaninsight.com/en/ar-ticle/serbia-police-arrests-tycoon-miskovic

4.http://www.theguardian.com/world/2013/may/06/kosovo-arrest-suspected-drug-boss-kelmemdi

5.http://www.b92.net/eng/news/cri-mes.php?yyyy=2014&mm=03&dd=18&nav_id=89677



8.For the activities of the Pink Pan-thers, http://www.newyorker.com/maga-zine/2010/04/12/the-pink-panthers?mbid=social_retweet



Special FocusISSOC Summer School

Contributions from Students

The ECPR_SGOC 4th Intensive SummerSchool on Serious and Organized Crime(ISSOC) took place in Catania on 23 June - 5July 2014. It was directed by Daniela Irrera andFrancesca Longo from the Department of Po-litical and Social Studies - University of Cata-nia, in partnership with the University of Bath,UK; Masaryk University, Czech Republic; Ni-colaus Copernicus University, Poland and sup-ported – other than the ECPR and theStanding Group on Organised Crime - by EUCommission Lifelong Learning Program.

The Intensive Summer School on Seriousand Organised Crime (ISSOC) is an advancedand high quality training programme offered toMasters students eager to promote the studyand discussion on the topic of serious and or-ganised crime and to the shifting challengesregarding its prevention. This year the acade-mic activities were particularly focused on therelevance of the European financial and eco-nomic crises on the criminal activities and onthe ways the EU tackles it.

The 2014 edition involved 24 studentsfrom partner Universities, enrolled in mastersprogrammes on topics related to Europeanand International studies in a set of differentia-ted activities, made of theoretical-academiclectures by an international team of scholars,including civil society representatives; workinggroups and students’ presentations; a finalface-to-face simulation on the EU policy-ma-king.

The ISSOC website is the following:http://issocct.wordpress.com/2014/02/21/is

soc/

The goal of a large number of criminal actsis to generate a profit for the individuals orgroups that carry out those acts. Money laun-dering (ML) is the process by which organizedcrime disguises its proceeds of crime. It is ofcritical importance for them, as it enables themto enjoy the profits without jeopardizing itssource. Money laundering is a criminal activitythat involves the practice of concealing assetsto avoid any discover of the unlawful activitythat sourced them.

The historical development of ML is largelycontained in the myth that the term was firstused by the Chicago gangster Al Capone andby its use of launderettes for hiding illegal al-cohol revenues during the US Prohibition in the1930s. However, it has become an issue of in-ternational concern, only in the last thirty yearsbecause it has become increasingly a processthat employs financial, accounting, legal andother instrumental conjunction with an objectthat has either used in, or derived from, manyunlawful activities.

The word “laundering” is used becausethese techniques are intended to turn dirtymoney into clean ones. Dirty money enters thefinancial system and is given the semblance oforiginating from a legitimate source often byusing corporate vehicles offering disguise, con-cealment and anonymity. Through this financial

crime, characterized by the placement stage,layering/structuring stage and integrationstage, the organised crime becomes a reallegal actor in legal economy.

Systems which fail to prevent money laun-dering expose themselves to societal and po-litical risks, because it implies the underminingof governance standards, fostering of corrup-tion and crime; it has negative economic im-pacts and it creates financial market instability,arising from decrease of investment, lowereconomic growth, distortion of competitionand, generally, it impedes economical develop-ment. In addition, money laundering stokes thelinkage between organized crime and terroristfinancing.

Considering the foremost dangers of ML,the need for a modern Anti-Money Laundering(AML) strategy has become widely acceptedwithin the international community, so muchthat it has been termed “the white collar crimeof the 1990s” by the Union Nation Office forDrug Control and Crime Prevention (UNODC).Money laundering counter measures have the-refore been achieving a central position bothin national and global programs, political de-clarations and international treaties. With theupsurge of terrorist financing, the normativeactivity at the international level has furtherrisen.

According to Sham’s reconstruction(Sham, 2004), Anti-Money Laundering has un-dergone four main phases. During the 1970s itwas in its incipient stage, suspicious recordkeeping and transactions were reported bybanks. The second stage, started in the 1980s,produced criminalization and internationaliza-tion. In 1989, the AML regime entered a supra-nationalization phase with the establishment ofthe Financial Action Task Force (FAFT), whosepurpose was to develop and coordinate the ef-forts to counter money laundering by identi-fying the trail of money flows in order to seizeand confiscate ill-gotten gains systematically.Following 9/11/2001, a new phase emergedwhen the FAFT’s mandate was extended tocover also terrorism financing.

The FATF is a multi-disciplinary body brin-ging together the policy-making power of legal,financial and law enforcement experts and,considering its aims and policies, it has be-come increasingly the institutional centre of aglobal supra-national legal regime. The FATFcurrently consists of 36 countries and interna-tional organizations, including the EuropeanUnion, and its membership includes the majorfinancial centre countries of Europe, North andSouth America, and Asia. In 1990, it has givenrise to 40 recommendations and in 2003 it is-sued a paper to enhance its special Recom-

Organised Crime as an actor in legal economy by Money Laundering

by Dario Giancani


-mendations which were set out as BestPractices for freezing of terrorist assets. FATFcountries are clearly committed to accept thediscipline of being subjected to multilateral sur-veillance and peer review. All things conside-red, in the European Union these measuresare essential for the creation of an effectiveanti-money laundering framework, even if thiscould be facilitated by the entrance of all, andnot only of majority, of EU Member States.

Since money laundering is a complexwide-spread and multi-faceted activity, the EuropeanUnion has approached it from different angles.Given the various methods by which the crimecan be facilitated, as well as the original crimesthat bring forth the revenue, combating theissue involves a multi-agency approach.

The focus is on regulating financial institu-tions with a view to preventing ML and on lawenforcement aspects. At first, until the LisbonTreaty adoption, the European Union (EU) hadchosen a cooperative approach about moneylaundering: it had encouraged the MemberStates to adjust their domestic laws accordingto EU general aims. Then, the Treaty on theFunctioning of the European Union (TFEU)started considering money laundering as anissue with cross-border dimension and it inclu-ded specific disposals in Judicial Cooperationin Criminal Matter, on the ground of “the prin-ciple of mutual recognition of judgments andjudicial decisions, including the approximationof the laws and regulations of the Member Sta-tes” (art. 82 TFEU) and establishing, throughthe adoption of the “minimum rules concerningthe definition of criminal offences and san-ctions”, to combat the areas of particularly se-rious crime on a common basis. EU moneylaundering legislation has a history extendingfor decades. Given the legal basis, as preven-tive measures, EU adopted the first directiveAML (91/308/EEC) in which it gives a definitionof money laundering, credit and financial insti-tutions; it introduced the obligation of the “re-gistration of the financial operations” againstmoney laundering and it creates the NationalFinancial Intelligence Units (FIU) in each Mem-ber State to collect and analyze information ofcredit or financial institutions.

In 2001, the EU adopted the second direc-tive AML (2001/97/EC) that extended the obli-gations anti-laundering to the “professionals”(i.e. notaries and independent legal professio-nals). The main keystone of the European sy-stem is represented by the third directive AML(2005/60/EC) on the prevention of the use ofthe financial system for the purpose of moneylaundering and terrorist financing. This Direc-tive introduced a new approach to prevent andto contrast the money laundering based on“active partnership” of banks, financial interme-diaries, insurance agents and professionals toreport any suspicious or unusual transactionsor activities. This directive, in addition, provideda common basis for implementing the FATF40Recommendations. The last rule was adop-ted a few months ago, and it included the 4thdirective AML (2014/42/UE) and a regulationon information accompanying transfers offunds to secure "due traceability" of these tran-sfers: both disposals provided for a more tar-geted and focused risk-based approach. The4th directive AML, among its regulations, im-proved clarity and transparency of the rules on

customer due diligence, it expanded the provi-sions dealing with “politically exposed per-sons”, it ensured a better coverage of thegambling sector (the former directive coveredonly casinos) and it included an explicit refe-rence to tax crimes.

A recent initiative legislative worthy of at-tention is the ‘European Parliament Resolutionof 23 October 2013’ on organized crime, cor-ruption and money laundering in which the Eu-ropean Parliament calls on the Commission tolaunch a European Action Plan -for the period2014-2017- against organized crime, corrup-tion and money laundering, which should in-clude legislative measures and positive actiondesigned to combat these criminal activities ef-fectively.

All EU acts have found support in manyagreements contract also by EU Member Sta-tes, such as the United Nations ConventionAgainst Illicit Traffic in Narcotic Drugs and Psy-chotropic Substances of 1988; European Con-vention on Laundering, Search, Seizure andConfiscation of the Proceeds from Crime of1990; Schengen Agreements. Indirectly signi-ficant are the European Convention on Extra-dition (1957) and the Convention establishingEuropean Police Office (EUROPOL) (1995).

Europol supports Member States in pre-venting and combating criminal money launde-ring activities, particularly those relating to theanalysis of suspicious transactions and any fi-nancial intelligence.Although money launde-ring exists, a specific and strengthened legalframework to combat the matter is apparent.Consequently, this remains one of the main ac-tivities of the European Organized Crime. Eu-ropol has produced a strategic analysis basedon the data collected in 2013 in Italy, and it hasobserved that the two main activities of the Ita-lian criminal organization are drug traffickingand money laundering. Measures againstmoney laundering have become a core area ofEU policy in the fight against organized crimeand ranks high on the current Member Statesagenda, as it was again confirmed by the lastEU directive.

Actually, the size of the phenomenon varydepending on the Member States, the refe-rence years, and the specific financial crimes.The number of persons/legal entities convictedfor money laundering offences -from 2005 to2010- decreased by 31.9%, and the number ofsuspicious transaction reports sent to law en-forcement decreased by 44.1%. Despite thistrend, the overall number of Unusual Transac-tion Report (UTR) decreased by 59.9%, theSuspicious Transaction Reports (STR) increa-sed by 3.9% and the Suspicious Activity Re-ports (SAR) increased by 7.7%. Therefore,current EU money laundering regulations needto be better enforced and, in the future, to fightthis problem it's necessary the continuous in-teraction and cooperation among the MemberStates.

The instruments to deter the "washing" ofmoney across the EU are transparency on in-formation, coordination of actions and integra-tion of laws. For this reasons, it's required thatthe source of funds must be better identifiedand that the information on whom ultimatelyowns and controls companies, trusts and otherlegal structures need to be made publicly avai-lable in registers across the EU.

Lot of difficulties are found in catching, in-terpreting and comparing the data, even if notall the Member States provide the data, butalso in legal, operational and statistical dissi-milarity: an examples is given by the distinction-and coexistence- of STRs, SARs, and UTRs.

REFERENCESDAMATO A. - DE PASQUALE P. - PARISI

N. (2011) Argomenti di Diritto Penale Europeo,Torino, Giappichelli Editore

EUROPEAN COMMISSION (2013) Pressrelease, Anti-Money Laundering: Strongerrules to respond to new threats, available onhttp://europa.eu/rapid/press-release_IP-13-87_en.htm?locale=en

EUROPOL Threat Assessment Italian Or-ganised Crime (2013) available onhttps://www.europol.europa.eu/sites/default/files/publications/italian_organised_crime_threat_assessment_0.pdf

EUROPOL Review General Report on Eu-ropol Activities (2011) available onhttps://www.europol.europa.eu/sites/default/files/publications/en_europolreview.pdf

EUROSTAT (2013) Money Laundering inEurope, available on http://epp.eurostat.ec.eu-ropa.eu/cache/ITY_OFFPUB/KS-TC-13-007/EN/KS-TC-13-007-EN.PDF

EUROSTAT (2010) Money laundering inEurope, Report of work carried out by Eurostatand DG Home Affairs, available onhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-10-003/EN/KS-RA-10-003-EN.PDF

HINTERSEER, K. (2002) Criminal finance:the political economy of money laundering in acomparative legal context, London, The HaguePALASTRA N. (2014) Transparency Internatio-nal European Union Liaison Office, EU PolicyPaper n° 1/2014, “Fighting money launderingin the EU: from secret ownership to public re-gistries”,

RYDER, N. (2011) Financial Crime in the21st Century: Law and Policy Hardcover, Chel-tenham, Edward Elgar Pub

SCHNEIDER, F. WINDISCHBAUER, U.(2008) Money laundering: some facts, Euro-pean Journal of Law and Economics

SCHOTT P. A. (2006) Reference guide toanti-money laundering and combating the fi-nancing of terrorism, World Bank Publications

SHAMS, H. (2004). Legal globalization:money laundering law and other cases. Lon-don, British Institute of International and Com-parative Law

UNGER, B. VAN DER LIND, D., (2013)Research Handbook on Money Laundering,Cheltenham, Edward Elgar Pub

UNITED NATIONS OFFICE ON DRUGSAND CRIME (1988) Report on Financial Ha-vens, Bank Secrecy, and Money Laundering,available on https://www.imolin.org/imolin/fin-haeng.html


Special FocusISSOC Summer School

Contributions from Students

byGiuseppe Gabriele Finocchiaro

Petra JežováEnrico LeottaPetr Netuka

Malwina Walenda

To write about corruption requires seekingan appropriate definition first. Although theterm itself is well known, definitions vary. Se-veral international institutions, dealing with thisphenomenon, experienced this difficulty. Wecan easily find different attempts to provide adefinition or even a classification: the WorldBank, for example, in a famous report of 1997“Helping Countries Combat Corruption: TheRole of the World Bank”, gave a very generaldefinition (“the abuse of public office for privategain”) and then listed five types of corruption,namely bribery, theft, political and bureaucraticcorruption, isolated and systemic corruptionand, eventually, corruption in the private sector. Only few lines were devoted to the latter: mo-stly, the report studied the corruption in the pu-blic sector, recognizing that a systemiccorruption in the public field, connected with acomplex legislation and an unsuited judiciarysystem, can favour corruptive practices in theprivate sector.

Although such an easy and quite clear de-finition might seem to be well explaining theterm, for the purpose of proper explication it ispreferable to use the definition of Professor Pe-trus van Duyne. His definition provides widerand more accurate explanation:

“Corruption is an improbity or decay in thedecision-making process in which a decision-maker (in a private corporation or in public ser-vice) consents to deviate or demands deviationfrom the criterion which should rule his or herdecision – making, in exchange for a reward orfor the promise or expectation of a reward,while these motives influencing his or her de-cision-making cannot be part of the justificationof the decision.”

The definition of Prof. van Duyne empha-sizes also the importance of taking into ac-count the sphere of private sector. Referringtowards this part of definition, the corruption isnot only the public issue but also the privateone. The main focus in its reasoning is devotedto the behaviour of the decision-maker, nomore considering the transmission of publicpower in favour of the private sector as the onlypossible corruption model. The presented de-finition supposes that the beneficiary might bealso any legal entity, public entities included,whilst private resources might be abused aswell.

Relating to the offered definition, it is im-

portant to stress that nowadays there are pri-vate companies economically even more po-werful than many states. These companiesinfluence many people´s daily life, their deci-sion making process is distributed and directinspection of every employee is impossible.The prerequisites for abuse of the power aredue to previously mentioned factors increasedalso in the private sphere.

There may be found many types of corrup-tive behaviour, e. g. bribery, embezzlement,theft, fraud or misuse of trust. To distinguishand classify them in practice may be very diffi-cult as the real crime very often involves morethan one category.

An investigation on corruption has alsobeen done by Transparency International. OnTI´s website , there is available well illustrativegraphics which quite clearly evaluates regionsaccording to the level of corruption. Accordingto the index from 2013, the highest corruptionperception is in Afghanistan, North Korea andSomalia. When considering regions, we cansee very high perception of corruption in nearlywhole region of Asia and Africa.

It is always difficult to estimate the costs ofan illegal phenomenon because there are notofficial data to be consulted: however, estima-tes from the World Bank Group (2012) quantifyabout 500 billion dollars the amount of private

Corruption as Preface to

Organized Crime


sector corruption in the developing coun-tries. If we consider that all the foreign assi-stance given in that year to developingcountries was roughly a third of that figure, wecan get an idea of the heavy impact of the cor-ruption especially in the private sectors ofthese countries. This is true both in terms ofthe increased costs of the works to be carriedout, both in terms of lost opportunities, as fo-reign investments will be directed elsewhere:in the private sector, corruption is seen as amassive tax on business, which causes lowerprofits for investors . Removing (or rather, re-ducing) the corruption is in the interest of manyactors involved in the economic processes: inthis regard, measures must be taken both interms of prevention than on the side of repres-sion.

Nowadays, also very important, is to focuson the role of criminal organizations’ influenceon corruption of banking sector as well as ca-pital market development. According to rese-arch conducted by The American Commissionon Law Enforcement and Administration of Ju-stice , immanent feature of modern criminal or-ganizations is not only committing crimes onthe conspiracy but also the monopolization ofcertain spheres of economic activity, forcingbankruptcies of banks, credit and subsidy fraudand financial manipulations effected throughcorruption.

Announced in June 2014 in Rome a reportprepared by Organised Crime Observatory(L'Osservatorio sulla Criminalità Organizzata)referred to the Mafia activity, there is indicatedthat the southern Italian mafia corrupt brokerson the Milan Stock Exchange to act in the ser-vice of the Mafia. As a result, brokers make in-sider dealing transactions on stock exchangeto help members of organized criminal groupsto purchase large blocks of shares of the big-gest companies. By becoming a significantshareholder, criminals take control of manycompanies in northern Italy.

Another example, showing growth of ma-fia’s activity on financial markets, is the case ofthe Vatican bank. Already several years ago, itbecame clear that the bank probably had rea-lised money-laundering activities: had accep-ted deposits from the mafia including incomefrom huge bribes taken by the ruling politiciansand had acted as a tax heaven in the heart ofRome with the Vatican extraterritoriality . Theproblem had been caused by the fact that theItalian banking supervision does not includethe Vatican area.

Taking into consideration examples pre-sented above, the corruption has a significantand negative impact on the functioning of ca-pital and financial markets because of it inhibitsthe free market economy and does not allowfor the development of real investors . Increasein the level of corruption in a country not onlycauses the spread of abuse in the markets but

also has adverse effect on the development ofwhole state. Investors and consumers loseconfidence not only to brokers but also to stateinstitutions, such as supervisors of banks,whose functions appear to be ineffective. Thebest example may be a case of quasi-bankinginstitutions Amber Gold in Poland who createda gigantic financial pyramid scheme based onlegal gaps in the Polish financial supervision .To ensure safety, each state should intensifyenforcement of the repair imperfections detec-ted by the supervisory authorities. The legisla-ture should also more closely follow thedevelopment of the market as to timely adjustthe law and include the supervision of the ne-west forms of movement of capital.

Related to the corruptive behaviour andmafia practices, there is in place to mention se-rious cases that lead to loss of lives. First casethat is linked with corruption in banking sectoris murder of Emanuele Notarbartolo from 1893. Emanuele was a former mayor of Palermoand director of the Banco di Sicilia. When hewanted to “clean” the management of thebank, damaging the Mafia political power, Ra-faelle Palizzolo, powerful politician at that timewith links to the Mafia, ordered his dead. Se-cond case is connected with judge Antonio Sa-etta and his son, Stefano, that happened in1988 . Antonio was member of Court of Appealand was scheduled to hear the appeal of theMaxi Trial. When he shown to be incorruptiblehe was killed together with his son when retur-ning to Palermo after the weekend in the coun-try.

The year 1984 is linked with murder of Giu-seppe Fava, called Pippo. Pippo was investi-gative journalist and founder of monthlymagazine in Catania “I Siciliani” . Magazine in-vestigated Cosa Nostra and tentacles in poli-tics and business, especially those of Sicily’sbiggest Catania-based construction firms. Thisyear, 2014 , in North-Rhine Westphalia, We-stern Germany, there were revealed 17 see-mingly construction-related businesses.Straw-man business was like clan copy Italianorganizational structures and were using inti-midation and violence to secure a lucrativemarket. This lead towards decline in buildingsector as honest businesspeople could notcompete with the prices of the companiesusing illegal labour.

A new typology of crime, environmentalcrime, is a good platform for future corruptiongrowth. Environmental crime is a heterogene-ous phenomenon, which comprises inside avariety of illicit actions. It has recently develo-ped the so called “organized environmentalcrime”: the criminal organizations are oftenable to detect in advance new areas of globaleconomy in which to invest. Paradigm of thenew prospects criminals is precisely the phe-nomenon of "eco-mafia" with its illegal disposalof industrial waste and radioactive waste.

Every year in Italy, of a total volume of 108thousand tons of waste, 35 thousand are di-sposed of in not correct ways or completely il-legal. The turnover is estimated at 15 thousandbillion of tons. It will be interesting to follow fu-ture development of environmental crime andrelated corruption.

Endnotes1. Buscaglia Edgardo, van Dijk Jan: Con-

trolling Organized Crime and Corruption in thePublic Sector;http://www.unodc.org/pdf/crime/forum/forum3_Art1.pdf; 18. 8. 2014.

2. van Duyne, Petrus C.; Will “Caligula” GoTransparent? – Corruption in Acts and Attitu-des; Forum on Crime and Society, vol. 1, nr. 2,December 2011; ISBN 92-1-130216-1; UnitedNations; New York; 2001; also available athttps://www.unodc.org/pdf/crime/publications/forum1vol2.pdf; 18. 8. 2014.

3. Corruption Perceptions Index 2013.http://www.transparency.org/cpi2013/results;18. 8. 2014.

4. Runde D., Haamed S., Magpile J., Thecosts of corruption, Report of the CSIS (Centerfor Strategic & International Studies) Project onProsperity and Development, February 2014.

5. The challenge of crime in a free society,Report by The President’s Commission on LawEnforcement and Administration of Justice,United States Government Printing Office, Wa-shington, 1967.

6. Primo Rapporto Trimestrale Sulle AreeSettentrionali, Per La Presidenza Della Com-missione Parlamentare Di Inchiesta Sul Feno-meno Mafioso a cura dell’Osservatorio sullaCriminalità Organizzata dell’Università degliStudi di Milano, direttore: prof. Fernando dallaChiesa.

7. Benton E. Gup, Bank Failures in theMajor Trading Countries of the World, Green-wood 1998.

8. Park, J., Corruption, soundness of thebanking sector, and economic growth: A cross-country study, Journal of International Moneyand Finance, 2012.

9. http://www.pozew-ambergold.pl/ 10. Dickie, J. Cosa Nostra: A History of the

Sicilian Mafia. 2004, 170. New York: PalgraveMacmillan. ISBN 1-4039-6696-6.

11. Dickie, J. Cosa Nostra: A History of theSicilian Mafia. 2004, p. 309. New York: Pal-grave Macmillan. ISBN 1-4039-6696-6.

12. http://isicilianidigiuseppefava.blog-spot.cz/

13. Diehl, Jörg: “I Will Tear His Head Off”:How Italian Mafia Is Infiltrating Germany. Spie-gel Online Internationalhttp://www.spiegel.de/international/germany/si-cilian-mafia-infiltrates-german-construction-bu-siness-a-963194.html, 2014.

14 ECPR Standing Group on Organised CrimeSeptember 2013, Volume 10, Issue 314 ECPR Standing Group on Organised Crime

September 2014, Volume 11, Issue 3

Special Issue editors: Dr. HelenaCarrapico (Aston University, UK) andDr. Anita Lavorgna (University of Wol-verhampton, UK)

Over the past two decades, the deve-lopment of modern societies has becomeintimately interconnected with informationtechnologies. Such trend is particularly vi-sible among the increasing number ofpersonal objects, household appliancesand professional structures connected toinformation networks. Although such evo-lution is usually applauded from an eco-nomic and societal perspective, it isalso understood as constituting a risk insecurity terms. As the degree of con-nectivity dependence of individuals,companies and critical infrastructuresgrows, so does the likelihood of techno-logy being abused, in particular for cri-minal purposes. As a result, cyber crimehas become, over the past few years,the object of increased concern in Eu-rope. Not only does it represent a con-siderable cost to societies, but it alsocontinues to constitute an importantchallenge for law enforcement and judi-cial systems, due to its technical com-plexity and rapid innovative character.

Although organised crime is generallypresented by policy makers and interna-tional organizations as a major actor incyber crimes, the academic literature has,so far, paid limited attention to this ele-ment. More specifically, limited researchhas been conducted on how differenttypes of organised crime groups usecyber space to conduct their traditionalactivities, and on how new illicit online ac-tivities have emerged as a result of orga-nised crime’s digital shift.

In view of countering this gap in the li-

terature, this special issue welcomestheoretical and empirical articles on theconnections between traditional and newforms of organised crime and cyberspace. Topics in this special issue include(but are not limited to) definitional deba-tes, national and international political re-sponses, online investigations (includingprevention and detection, investigation te-chniques, search, seizure, forensics, pro-secution and trial), law enforcementcooperation, and critical perspectives.

The Special Issue will be published inEROC in September 2015. Arti-cles should be submitted by the5th of January 2015. However,authors are strongly encouragedto express interest and send ab-stracts of potential contributionsto the editors by the 3rd of No-vember 2014.

For expressions of interest,please contact the editors of thespecial issue at [email protected] and [email protected]. For moreinformation about EROC, pleasevisit our website at http://sgoc-n e t . o r g / s i t e / t h e - r e v i e w -eroc/.CALL

News & Announcements

The European Review of Organised Crime

CALL FOR PAPERS EROC Special Issue

Space Oddity? Exploring Organised Crime Ventures in Cyber Space


gh

ECPR Standing Group on Organised CrimeSeptember 2014, Volume 11, Issue 3

Time: 8:30am - 5:30pm Venue: Institute of Advanced Legal

Studies , Charles Clore House , 17 Rus-sell Square, London WC1B 5DR

No registration fee

This event is the second in a series ofannual conferences on Criminal Justiceorganised jointly by the Criminal JusticeCentre at Queen Mary University of Lon-don and Renmin University (Beijing,China). The last conference took place atRenmin University in October 2013 andfocused on the different crime problemsand legal regulations in the area of orga-nised crime in China and Europe. Thisyear's follow-up conference will bring to-gether experts from China and Europe todiscuss the impact of fraud and moneylaundering, and more generally financialcrime, on national, regional and interna-tional economies.

While focusing on legal perspectives,this conference is open to other discipli-nes exploring the field, such as crimino-logy, sociology, geography andaccounting. It aims at engaging a varietyof academic and practitioner perspectives

to open up a practice-focused, cross-cul-tural dialogue on the topic. Papers are in-vited on the themes of asset recovery,credit card fraud, money laundering, pu-blic and private responses to financialcrime, financial crime in the justice sy-stems and many more.

Speakers include:Professor Shi Yanan, Law School,

Renmin UniversityAssociate Professor Wang Ying,

Renmin UniversityProfessor Liu Mingxiang, Law

School, Renmin UniversityProfessor Xie Wangyuan, Law

School, Renmin UniversityProfessor Valsamis Mitsilegas,

Queen Mary University of LondonProfessor Peter Alldridge, Queen

Mary University of LondonDr Saskia Hufnagel, Queen Mary

University of LondonProfessor Mike Levi, Cardiff Univer-

sityProfessor Clive Walker, University

of LeedsProfessor Simon Bronitt, University

of Queensland

Professor Brigitte Unger, UtrechtUniversity

Professor Toine Spapens, TilburgUniversity

Ms Michelle Coninsx, President ofEurojust

Mr Francesco Lo Voi, NationalMember for Italy, Eurojust

Mr Richard Lowe, Economic CrimeCommand, National Crime Agency

Mr Igor Angelini, Head of FinancialIntelligence, Operations Department, Eu-ropol

Professor Wang Wenhua, LawSchool, Beijing Foreign Studies Univer-sity

Associate Professor He Ronggong,Law School, Wuhan University

Professor Lin Wei, Law School,China Youth University for Political Scien-ces

Associate Professor Wu Jiang, LawSchool, Suzhou University

If you are interested in attending theconference, please register athttp://www.law.qmul.ac.uk/events/items/137641.html

Second (annual) Queen Mary-Renmin Criminal Justice Conference Legal Responses to Financial Crimes

17-18 October 2014

15

If you are near London...

If you are near Cardiff...

Cardiff University is hosting a postgraduate researchers con-ference centred on Transnational Organised Crime, exploring theresearch methods and theory involved, the challenges it can pre-sent to society, and the policy responses that are implementedin an effort to address it. PGRs are invited to submit abstracts ofno more than 200 words for a research paper they wish to pre-sent.

This University Graduate College-funded conference offersa valuable opportunity not only to network with scholars from Car-diff and other UK institutions, but to submit your paper for peerreview and feedback prior to publication or presentation at ano-ther conference, as well as practicing public speaking, answeringquestions and engaging in a discussion with the audience, inclu-ding distinguished members of Cardiff’s academic faculty.

Transnational Organised Crime Challenges and Responses

17 October 2014Cardiff University

If you are near Shanghai...Organized Crime and

Its Prosecution30 October - 1 November 2014

East China University of Political Scienceand Law

Organisers: Professor Federico Varese of Oxford University,Professor Qiu Geping of East China University of PoliticalScience and Law and Professor Mary Vogel of University of Man-chester.

For our conference in Shanghai, we plan to host 60 to 80scholars from east and west to continue the dialogue begun inLondon this past January and in Manchester in July. Our list ofparticipants is an exciting one. We believe this can be the coreofan ongoing network. This third conference will spotlight, thoughagain not exclusively, economic crime and cybercrime. The mee-ting will emphasize Asian crime and transnational cooperation inpolicing and prosecution.

The fee for this third gathering will be 60 GBP, inclusive of aconference dinner.

For info: Prof. Mary Vogel ([email protected])



This newly launched peer-reviewed journalacts as an international arbiter, bringing diffe-rent key informants together and works as aclearinghouse of knowledge and information inthe realm of trafficking and global crime. Thejournal invites research articles as a part of theopen call from the scholars around the world.

Visit us at

http://www.brownwalker.com/ojs/index.php/JTOCS

Publication Frequency: 4 Issues per year Mode of Publication: Open access with

free submission & immediate online publicationupon acceptance

Focus and ScopeThis journal is an endeavor to understand

the basic structure of criminal organizations,the trends and patterns of different forms of

trafficking, and the structural and functionalmechanism that reproduces and reinforces theprocesses that perpetuate the phenomenonconsidering trafficking not as discrete eventsthat are unconnected, but to scrutinize themwithin the wider framework of human insecurityas structurally dogged based on the theoreticalresearch and empirical evidence from cross-country study.

The journal also aims to include researcharticles that analyze the roles and functions ofthe formal and voluntary agencies that are in-volved in combating trafficking within the cur-rent international security debate. Theinclusion of structures of violence, high de-grees of resilience, a remarkable degree ofadaptability, and the role of human agency wi-thin this re-conceptualization provides a mana-geable framework from which humaninsecurity can be considered, and the magni-tude of violence from trafficking may be under-

stood and examined.The journal broadly covers areas, but not

limited to, including the linkages between traf-ficking; smuggling and slavery, sex trafficking:role of perpetrators; pimps; clients and victims,labor trafficking, child and teen victims in traf-ficking, trafficking for sham marriages; forcedbegging and domestic servitude, traffickingand insecurity: identifying and supporting thevictims, drug trafficking, trafficking in organs;tissues and cells, trafficking in wildlife, endan-gered species and natural resources, traffic-king in arms and ammunition, politics anddiscourses surrounding trafficking, traffickingas a business: profit; costs and risks, techno-logy and trafficking networks, traffickers andtheir organizations, strategies against traffic-king: role of the security sector; governmentand non-government organizations, measuresto combat trafficking, and trafficking laws andregulations etc.

CALL FOR PAPERSJournal of Trafficking, Organized Crime and Security


Did You Know?

The ECPR SGOC shall announce the winner of the

Best Paper Award in thenext newsletter! The papershall be selected among

those presented during ourSection in Glasgow ‘Under-standing and Tackling the

Roots of Insecurity’.

Did You Know?

The ECPR SGOC is in the process of organi-

sing its own thematic confe-rence on Organised Crime

Studies in 2015. Watch this space and fol-

low us on Facebook, Twitterand on our website in the next

months. And remember tosign up to our newsletter!

The Next Issue of the ECPRStanding Group on Organised

Crime Newsletter will be published

at the end of January 2015.

The deadline for articles andcontributions

is 20th of January 2015.

For the newsletter we are looking for shortoriginal articles (1000-1500 words) on differentorganised crime-related themes. These contri-butions can stem from yur ongoing researchor from summaries of published material, whichyou might wish to circulate among the organi-sed crime research community.

You may also contribute to the content of thenewsletter by sending us any announcement ofconferences/ workshops/ literature referencesyou feel could be of interest to this field.

CONTRIBUTIONS!You are also invited topropose things that couldimprove the quality of thenewsletter.

Please send your sugge-stions and articles to:

Anna [email protected] Ernst [email protected]

SUGGESTIONS!

Visit the SGOC Website at: www.sgocnet.orgPlease register your data to receive news and info from the ECPR SGOC

Visit the SGOC blog at: http://sgoc.blogspot.co.uk

Join Our Facebook Group ..and Like us on Facebook!And we are also on LinkedIn and Twitter @ecpr_sgoc!

DO NOT MISS...all the content from this and previous newesletters, and info on theauthors, will be uploaded on the new website www.sgocnet.org

AnnouncingECPR

General Conference 2015

Université de Montréal

26 - 29 August 2015,Canada

ECPR Standing Group on Organised CrimeSeptember 2014, Volume 11, Issue 3 17

http://www.ecpr.eu/Events/EventDetails.aspx?EventID=94

Photo source: http://www.myexplore.ca/data/uni-versities_photos/00000048_lrg.jpg

http://www.sgocnet.org

http://www.sgocnet.org/

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