Open Drug Warfare Could be Part of Europe’s Panorama in Months to Come
Part one of COHA’s ongoing series on Latin American Drug Trafficking

Strong Euro Lures Drug Traffickers to Ship to EU Market

While North America continues to represent the largest single consumer sector for drugs, cocaine seizures have been declining there since 1995. Meanwhile, the euro continues to rise against the dollar and is just one more incentive for drug traffickers to profit from a growing European drug market. Increased numbers of cocaine traffickers in particular have discovered an ideal market for increased profits by attracting a new generation of clients and generating greater volume. The use of illegal drugs, especially among prospering European youth, has increased to unprecedented levels; it is estimated that 10 million Europeans have tried cocaine at least once. In Europe, a kilogram of cocaine sells for about $50,000, compared to $30,000 in the U.S. According to a 2006 Europol report, an estimated 250 tons of cocaine enter the EU annually by way of sea or air. With an ostensibly saturated North American drug market, a clearly concerned EU leadership will want to focus on concrete rather than theoretical approaches to curbing the burgeoning availability of illegal drugs in Europe before the problem becomes unmanageable. As use grows, and profits reach record levels, Europe could soon be witnessing the same kind of open warfare between local cartels and police forces that is now being seen in such Latin American countries as Mexico and Colombia.

Trade Incentives are Not Enough to Stop Cocaine Traffickers

The UN Office on Drugs and Crime calculated that the global production of cocaine in 2004 increased to an estimated 687 tons; 56 percent of which originated in Colombia, 28 percent in Peru, and 16 percent in Bolivia. It appears that the promotion of alternative legal crops under the EU’s preferential trade system, GSP+, are not sufficient to control drug production and trafficking within the drug-exporting nations of the Andean Community (CAN).

The EU prides itself upon having a comprehensive approach as well as a series of tactical plans in the fight against drugs, including anti-drug cooperation provisions in all multilateral trade agreements it has signed with the CAN nations, Mexico and now Chile. In addition, the European Commission (EC) has attempted to fortify relations with Latin America by offering technical assistance in data collection, alternative development strategies and supply and demand reduction programs. Most of the EU support programs, for operational purposes, are located in the Andean region, with these projects adding up to more than € 140 million in 2005-2006.

The EU and the U.S. are CAN’s two largest trading partners. CAN is composed of Bolivia, Colombia, Ecuador, Peru and now Chile. In April 2006, President Hugo Chávez took Venezuela out of CAN, and as recently as June 7, 2007, three Peruvian cabinet members called for the country to consider resigning from it as well. President Chávez cited the pending free trade agreements between Peru and Colombia with the U.S. as one of the primary reasons for Caracas’ action. Peru’s possible departure could shake up the body in a very fundamental manner. The EU has increased its trade with CAN from € 9 billion in 1980 to € 15 billion in 2004, with exports to the EU countries accounting for around € 9 billion. In the past, CAN fell under the EU’s General System of Preferences (GSP), along with special advantages for those countries engaged in a good faith effort of combating drug production and trafficking. However, because this arrangement provided for about 90 percent of all of CAN’s industrial and some agricultural products to enter the EU market duty free, it was found to violate the WTO trade regulations. Therefore, CAN now falls under the EU’s new trade preferential system, GSP+, which encourages the fight against drugs and attempts to sustain development in the region, while maintaining the previous level of benefits.

The Caribbean is a Perfect Location

Most of Europe’s imported cocaine arrives directly from South America, but much of it is also indirectly routed through Central America, West Africa and the Caribbean. Albert R. Ramdin, Assistant Secretary General of the Organization of American States, said in a speech on March 20, 2007 that, “almost 50 percent of the drugs transshipped through the Caribbean find their way to Europe.” In 2006, the U.S. government identified 20 countries as major drug producing or transit areas, with four in the Caribbean– Haiti, the Dominican Republic, Jamaica and the Bahamas. The 2007 report issued by the UN Office on Drugs and Crime (UNODC) stated that in 2005, about 10 tons of cocaine were transited through Jamaica and 20 tons went through Haiti and the Dominican Republic. In addition, research has been done on the transfer of drugs by way of the Caribbean Sea, flowing from South and Central America to regions with high demand, such as Europe and the U.S. There is strong evidence that seven Eastern Caribbean, English-speaking islands–Antigua and Barbuda, Barbados, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines– form an Eastern transit zone. This passage is a popular waterway for drug traffickers en route to Europe, while Western and Central Caribbean exporters mainly cater to the North American market.

West Africa has become a warehouse and intermediary stop in the trafficking from Latin America to European gateway countries such as Spain and Portugal. According to UN statistics, officials in both countries seized a combined 70 tons of cocaine in 2006, almost the same amount that was apprehended in all of Europe during 2004. Donald Semesky, chief of financial operations at the U.S. Drug Enforcement Agency, stated that the seizure of €5.4 billion aboard a Spanish charter jet was an important contributing factor in leading to the arrest of drug kingpin Hugo Bernel in March 2007. Furthermore, West Africa has both geographical appeal for Latin American cocaine traffickers and accessibility for dealers selling Asian heroin and Chinese chemicals used as precursors to produce hard and synthetic drugs.

Europol and the UN International Narcotics Control Board Take Action

The Europol Drugs Unit introduced Project COLA (Europol 2006), in an effort to identify and target drug traffickers, especially those operating out of Latin America and who are involved in the European trade. The project includes live investigations and innovations which obtain strategic intelligence in the EU member states. Project COLA includes an Analysis Work File (AWF), the system used by Europol to collect, analyze, and disseminate drug-related intelligence. In 1999, Operation Purple, under the aegis of the United Nations International Narcotics Control Board (UNCB), began to target the use of potassium permanganate, one of the main chemical components used to destroy impurities in the production of cocaine.

In 2004, 1.4 tons of potassium permanganate were apprehended, but since the introduction of Operation Purple, traffickers often find methods to avoid the authorities. The EU is concerned about the role of the Caribbean Islands because there is speculation that traffickers are also diverting potassium permanganate to the sub-Andean region, by means of the islands. In light of these inconsistencies, the UN has encouraged stricter criteria to decipher the source of the chemicals used in cocaine production, the countries involved in transiting the materials and where the chemicals were being inventoried and housed.

The EU Introduces a Strategy and Action

The EU Drugs Strategy (2005-2012) was formulated by the European Council in Brussels in 2004 to combat drug use and trafficking over the next eight years. The report’s introduction acknowledges that previous EU legislation has not noticeably affected drug supply or demand at the national or supranational level. Therefore, the strategy stresses improvements in these areas regarding research, evaluation and international cooperation. In order to reduce demand, the importance of prevention, early intervention and rehabilitation are all emphasized in the EU literature. The EU does not blame Latin America nor specific sources which are otherwise notorious for their drug trafficking. Rather, its members accept responsibility for their own transfer of synthetic drugs to these “third countries.” The strategy also urges international cooperation and dialogue to further social and political development in hopes of decreasing the stream of drugs spreading to the EU market. The border countries of the EU, the Balkan states, Afghanistan, Latin America, the Caribbean and Morocco are all seen as potential drug routes that deserve specific attention.

The Drug Action Plan 2005-2008 is the first of two scenarios to specify the actual implementation of the strategy in accordance with a timetable. The measures taken to reduce the supply of drugs include joint operation projects involving Europol, Eurojust as well as EU member states, and seek to target the money laundering associated with international drug crime. A study carried out by the European Commission on drug-related crime prevention in “third countries” has been completed and its findings are projected for release in 2008. Furthermore, member state representatives were sent to producer countries as well as nations along established trafficking routes to coordinate cooperative law enforcement procedures in those affected states. Although this process is described as ongoing, the Action Plan claims that a number of operations have been initiated and completed. A review process for the current cooperative action plans in Latin America and the Caribbean was carried out in 2006. There is also an initiative to enhance the exchange of information, research and assessment of priorities in drug legislation now being drafted which specifically involves the EU and other countries.

What Has Been Accomplished?

Undoubtedly, the Drug Action Plan 2005-2008 improves upon many of the previous plan’s shortcomings and deficiencies; however, many of the problems recognized in 2000 remain unresolved. A 2000-2001 report by the UNODC stated that “Europe has increased its share of transshipped cocaine from 10 percent in the early 1990’s to 32 percent, or 80 metric tons, in 2000.” Some 165 metric tons of cocaine pass through the Caribbean on the way to Europe. The EU has acknowledged the Caribbean as a major area of cocaine transit now within the scope of the EU/Caribbean/U.S. maritime cooperation office. This facility was established to allow for deeper dialogue and greater cooperation on drug trafficking initiatives by affected maritime nations. Nevertheless, the Caribbean continues to be a critical intermediary zone for drug transit. According to a 2006 Europol report, Colombian authorities had even managed to seize a submarine under construction that potentially would have been able to transport some 15 tons of cocaine through the Caribbean at any one time. About an estimated 30 tons of cocaine is transported by air couriers annually from South America and the Caribbean to airports in Spain, Portugal, the Netherlands, France, and the United Kingdom. In response air smuggling, authorities in the Netherlands implemented the “100% Control” strategy which involved meticulous searches of passengers arriving in Amsterdam from the Caribbean, Suriname and Venezuela. In 2003, 80 to 100 couriers per day passed through the airport; however, this figure decreased to 10 couriers per month by October, 2005. In 1999, the EU claimed that under the Action Plan 2000-2004, cocaine use was moderately increasing, yet it still was at a relatively low level. The Action Plan 2005-2008 indicates that it was now becoming a genuine problem for member states. If adequate preventative measures had been taken in 1999, there may have been a smaller European market for cocaine today. Such defensive measures could have included more stringent language in bilateral trade agreements, with threats of putting an end to preferential treatment, such as the GSP+, if individual hemispheric countries did not quickly and sufficiently establish that they were combating drug trafficking.

The Economic Worth and Social Ramifications of Drug Trafficking

The transit of drugs to the European market through the Caribbean has had destructive social repercussions for the region and, in particular, for its youth. Former UN Secretary-General Kofi Annan pinpointed youth unemployment as a key factor that exacerbates drug abuse and crime. He observed that in 2006, “Halving the world’s youth jobless rate, bringing it roughly in line with the adult rate, would add as much as $3.5 trillion to global GDP. In Latin America and the Caribbean alone, the projected gain of $298 billion would equal the combined annual GDP of Costa Rica, Ecuador, Dominican Republic and Peru.” The cocaine market was worth about $70 billion in 2003 while the GDP of the entire Caribbean was $31.5 billion in 2004. Annan addressed youth employment because it is invariably a preventative method which can be used to battle illegal drugs. However, the value of the narcotics flowing through the Caribbean region may be greater than the value of its legitimate economy.

Cartel money for those in the Caribbean, who perform trade favors for drug traffickers from South and Central America, usually involve only a select few. In 2001, for example, the UNODC cited that “about 12,000 people obtain 75 percent of the total drug income.” These people are mainly from the ruling elite or their servitors, and the governments of Caribbean nations are often too weak to effectively combat the power and the capacity for social destruction that the traffickers are able to bring to any given island. In a 2007 World Bank report, it was stated that Dutch authorities estimated that 75 percent of crime in the Netherlands Antilles is drug-related. Drug trafficking may account for 80 percent of the 800 violent deaths that occur annually in Puerto Rico. This affects the likelihood that outside businesses will invest in the area. In Jamaica, 37 percent of business managers reported that crime negatively impacts the productivity and investments in the region. Caribbean youth are drawn to the drug life through the influential marketing, and the superficial glamour of the lifestyle, of drug lords, or by special provisos. For example, in the Dominican Republic, the youth are immune from prosecution in adult courts, so the comparative cost of their involvement in the drug trade is considerably lower than that of their adult counterparts. Furthermore, the rewards are relatively greater for those youths who remain in the industry, sometimes for a lifetime, further sharpening their prospects for addiction and their utility to the drug-related clientele and service staff.

The Future

Both the EU Drugs Strategy Plan and the Drug Action Plan of 2005 focus on preventative and cooperative efforts in order to construct a united EU front against drugs. The plan also assists developing regions with research and drafting of multilateral and bilateral trade agreements meant to create a constructive path by discouraging drug trafficking. Two years later, however, the demand for drugs in the EU is increasing. Furthermore, the EU market has become progressively more tempting for drug traffickers due to the rising value of the euro against the dollar. While more active law enforcement procedures and the use of trade agreements with the EU are potentially needed for Latin America and the Caribbean to be able to accurately address the scope of demand for illegal drugs, it should be taken into consideration that the region’s already limited resources are being drained unfairly by economic transactions and expenditures which are not always in its interests.

This analysis was prepared by COHA Research Associate Jacquelyn Godin
June 25th, 2007