Where does the money of drug trafficking go?

Gabriel Henrique de Paula Alves

Assistant Director of UNODC

Drug trafficking is one of the illicit sources to financial criminal activities like the smuggling of firearms, humans (mainly women, which are obligated to work as prostitutes) and strengthen criminal organizations with the money laundering (BROOKINGS, 2015). In 2015, The report from the US Drug Enforcement Organization, considered the “drug overdoses kill more people in the US than car accidents or guns” (BBC NEWS, 2015). Some deaths are through prescription drugs, others by cocaine or, increasingly, heroin”. In this same news the director of Joint Interagency Task Force South for the US Coast Guard, Christopher Tomney, declared,

The cartels are very innovative. Due to their large profits, they have a lot of money they can throw at technology. (…) In the early days of this task force – and we’ve been around for 26 years – we saw much higher movement using non-commercial aircraft to fly the drugs northwards. (…) [Now] well over 95% of the drugs are moving on the water via container ships, non-commercial vessels, pleasure boats, sail boats, fishing boats. They also have fast boats which try to outrun our law enforcement assets. (BBC NEWS, 2015).

In 2015, the White House study reported the amount of $ 109 billion, which came from drugs trafficking in 2010. It was relates how these illicit activities increased compared to 2000. Americans spent $108 billion on illegal narcotics in 2000 (THE WHITE HOUSE, 2015). According to Tom Wainwright, author of Narconomics, “Most of the profits involved in the drugs business actually stay here in the United States or in Europe, where the consumption happens” (BUSSINES INSIDER, 2016). Moreover, the route of cocaine has the participation of many countries on South America, like Colombia, Bolivia, Paraguay, Brazil, Venezuela, mainly in view of the power of the cartels on the Colombia and Mexico, that the drugs are laundered and cash collected, “the process of filtering the money back to a drug cartel’s headquarters begins” (BUSSINES INSIDER, 2016).

Since cash flows, particularly multimillion-dollar amounts, attract a lot of attention, criminal organizations rely both on bulk-cash smuggling and money laundering to move that money around, Mike Vigil, the former head of the US Drug Enforcement Administration’s international operations, told Business Insider (BUSSINES INSIDER, 2016).

It was reported by the US Office of National Drug Control, in 2015, the smuggler which invest around $20, 000 per kilo, on the final process he could receive about $150,000 per kilo or more.Below there is a graphic which relates the US spending on illegal drugs, in billions:


Imagem 1 blogSource: US Office of National Drug Control, 2015


Another problem caused by drug trafficking is money laundering which is not only finance by the cartels or criminal organizations. Also as it was reported by the DEA in 2015, there is an implication of large multinational companies and banks that facilitates the “money-moving”, like the Wachovia and HSBC, and they are under investigations and sanctions in US, due to criminal activities.

The Sinaloa Cartel used US drug proceeds to purchase clothes imported from China that were stored in the targeted fashion businesses’ warehouses (…)Large multinational banks have also been implicated in the cartels’ massive money-moving operations. Both Wachovia and HSBC have faced federal investigations and punishments in the US in relation to illicit money dealings. (DEA, 2015).

imagem 2 blog.png

SOURCE: DEA NDTA, 2015

This map explains how is the trade-based money laundering and the route among China, Los Angeles, Mexico, and it’s important to remind, the drug trafficking has the major power in America. Nevertheless, region like Asia, Africa and Middle East suffering with the same war.

Below there is a video, which explains faster “How Mexican drug cartels make billions selling drugs”:

http://www.businessinsider.com/how-mexicos-drug-cartels-make-billions-chapo-ioan-grillo-cocaine-2016-2


REFERENCES

 

BBC NEWS. How do cartels get drugs into the us?. Disponível em: <http://www.bbc.com/news/world-us-canada-34934574&gt;. Acesso em: 14 ago. 2017.

BROOKINGS. The network effect: trafficking in illicit drugs, money, and people in latin america. Disponível em: <https://www.brookings.edu/blog/order-from-chaos/2015/12/03/the-network-effect-trafficking-in-illicit-drugs-money-and-people-in-latin-america/&gt;. Acesso em: 14 ago. 2017.

BUSINESS INSIDER. Narconomics: ‘the real drugs millionaires are right here in the united states”. Disponível em: <http://www.businessinsider.com/where-drug-money-goes-2016-3&gt;. Acesso em: 14 ago. 2017.

THE NATION. Why is the us still spending billions to fund mexico’s corrupt drug war?. Disponível em: <https://www.thenation.com/article/us-connection-mexicos-drug-war-corruption/&gt;. Acesso em: 14 ago. 2017.

THE WHITE HOUSE. National drug control strategy. Disponível em: <https://obamawhitehouse.archives.gov/ondcp/policy-and-research/ndcs&gt;. Acesso em: 14 ago. 2017.

UNODC. Drug money and opiate trafficking on the balkan route, focus of new unodc report. Disponível em: <https://www.unodc.org/unodc/en/frontpage/2015/november/drug-money-and-opiate-trafficking-on-the-balkan-route–focus-of-new-unodc-report.html&gt;. Acesso em: 14 ago. 2017.

UNODC. Drug trafficking and the financing of terrorism. Disponível em: <http://www.unodc.org/unodc/en/frontpage/drug-trafficking-and-the-financing-of-terrorism.html&gt;. Acesso em: 14 ago. 2017.

 

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