Drug Money: the illicit proceeds of opiates trafficked on the Balkan route

Drug Money: the illicit proceeds of opiates trafficked on the Balkan route

2015

Drug Money: the illicit proceeds of

opiates trafficked on the Balkan route

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UNODC Disclaimers

In this document, South-Eastern Europe is understood to include the following: Albania, Bosnia and Herzegovina, Croatia, Montenegro, Serbia, the former Yugoslav Republic of Macedonia and Kosovo under United Nations Security Council Resolution 1244.

All references to Kosovo in the present document should be understood in the context of the UN Security Council resolution 1244 (1999). All references to Macedonia in the present draft document should be understood in the context of the UN Security Council resolution 817 par.2.

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contributory organizations and neither do they imply any endorsement.

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delimitation of its frontiers or boundaries.

Comments on this study are welcome and can be sent to:

Division for Policy Analysis and Public Affairs 8QLWHG1DWLRQV2IˉFHRQ'UXJVDQG&ULPH P.O. Box 500

1400 Vienna Austria

Tel: (+43) 1 26060 0 Fax: (+43) 1 26060 5827

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Preface

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The recent UNODC $IJKDQLVWDQ2SLXP6XUYH\ has shown that cultivation and production of opium in the country KDVGHFOLQHG7KLVLVLQGHHGZHOFRPHQHZV%XWLIZHDUHWRFDSLWDOLVHRQWKLVWKHUHLVDUHDOQHHGIRUWKH$IJKDQ

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to close cooperation.

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Acknowledgements

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Contents

Preface 3

Introduction 7

Executive summary 9

The way forward 13

1. The Balkan route 17

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1.1.2. Transit countries 20

1.1.3. Final destination countries 21

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2.2.1. Country connections 36

2.2.2. Flow of opiates 36

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Annex.4.1. International trade prices 86

Annex.4.2. Wholesale prices 87

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Abbreviations

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Introduction

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route countries.

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2 FATF, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation. The FATF Recommendations.

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3 UNODC, World Drug Report 2010 (Vienna, 2010).

4 UNODC, Afghan Opium Survey 2015 (Vienna, 2010).

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7 UNODC, The Illicit Drug Trade through South-Eastern Europe (Vienna, 2014).

Figure 1. The main trafficking routes of Afghan opiates

Note: The boundaries and names shown and the designations used on this map do not imply official endorsement or acceplance by the United Nations. The dotted line represents approximately the Line of Control in Jammu and Kashmir agreed upon by India and Pakistan. The final status of Jammu and Kashmir has not yet been agreed upon by the parties. The final boundary between the Sudan and South Sudan has not yet been determined. The trafficking routes represented on the above map should be considered broadly indicative and based on data analysis rather than definitive route outlines. Such analyses are based upon on data related to official drug seizures along the trafficking routes as well as officilal country report and Annual Response Questionnaires. Routes may deviate to other countries along the routes and there are numerous secondary flows that may not be represented.

Source: UNODC.

EUROPE:* West and Central & Eastern Europe (except Russian Federation)

EUROPE:** South-Eastern Europe

Flows of heroin from/to countries or regions (based on heroin seizures)

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ISLAMIC REPUBLIC OF IRAN

18

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Figure 2. The Balkan route countries/territory

Note: The boundaries and names shown and the designations used on this map do not imply official endorsement or acceplance by the United Nations. The dotted line represents approximately the Line of Control in Jammu and Kashmir agreed upon by India and Pakistan. The final status of Jammu and Kashmir has not yet been agreed upon by the parties.

Source: UNODC.

The Balkan route supplies illicit Afghan opiates to the following 32 countries/territory: Albania; Austria; Belgium;

Bosnia and Herzegovina; Bulgaria; Croatia; Czech Republic; Denmark; France; Germany; Greece; Hungary; Iran (Islamic Republic of); Ireland; Italy; Kosovo; Luxembourg; Montenegro; the Netherlands; Norway; Poland; Portugal; Romania;

Serbia; Slovakia; Slovenia; Spain; Sweden; Switzerland; Turkey; the United Kingdom of Great Britain and Northern Ireland; and the former Yugoslav Republic of Macedonia. For the purposes of this study they are collectively referred to as “the Balkan route” or “Balkan route countries”.

1.1. Source, transit and final destination countries

Illicit Afghan opiates in the form of heroin (including morphine) and of small quantities of opium enter the Balkan

route by crossing the border with the Islamic Republic of Iran. Small quantities of Afghan opiates also reach the

Opium production in Afghanistan

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unprocessed.

Figure 3. Afghanistan: source of all illicit opiates trafficked on the Balkan route

8 UNODC, The Illicit Drug Trade through South-Eastern Europe (Vienna, 2014).

9 UNODC, $IJKDQLVWDQ2SLDWH7UDIÀFNLQJWKURXJKWKH6RXWKHUQ5RXWH(Vienna, 2015).

10 UNODC, World Drug Report 2013 (Vienna, 2013).

11812'&DQG,VODPLF5HSXEOLFRI $IJKDQLVWDQ0LQLVWU\RI &RXQWHU1DUFRWLFVAfghan Opium Survey 2014 (Vienna, 2014).

,VODPLF5HSXEOLFRI,UDQE\SDVVLQJWKURXJK3DNLVWDQ

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southern route.

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Note: The boundaries and names shown and the designations used on this map do not imply official endorsement or acceplance by the United Nations. The dotted line represents approximately the Line of Control in Jammu and Kashmir agreed upon by India and Pakistan. The final status of Jammu and Kashmir has not yet been agreed upon by the parties.

Source: UNODC.

AFGHANISTAN TURKEY

PAKISTAN ISLAMIC REPUBLIC

OF IRAN

Source country Balkan route entry countries Possible main trafficking route Possible minor trafficking route

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Figure 4. The three branches of the Balkan route through South-Eastern Europe

Note: The boundaries and names shown and the designations used on this map do not imply official endorsement or acceptance by the United Nations.

Source: UNODC.

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12 UNODC, The Global Afghan Opium Trade (Vienna, 2011).

13 UNODC, The Illicit Drug Trade through South-Eastern Europe, (Vienna, 2014).

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border:

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Balkan route countries/territory The northern branch of the Balkan route The western branch of the Balkan route The southern branch of the Balkan route Trafficking routes

19 UNODC, World Drug Report 2010 (Vienna, 2010).

20 UNODC, Opiate Flows through Northern Afghanistan and Central Asia (Vienna, 2012).

21 UNODC, The Illicit Drug Trade through South-Eastern Europe (Vienna, 2014).

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to reach Europe.

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2: The monetary value of illicit opiates

trafficked on the Balkan route

2: The monetary value of illicit opiates trafficked on the Balkan route

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2.1. Estimating the total quantity of illicit Afghan opiates trafficked on the Balkan route

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a demand-based approach (see Box 2).

Figure 5. Total quantity of opiates trafficked on the Balkan route

OPIATES SEIZED

ON THE BALKAN ROUTE OPIATES CONSUMED

ON THE BALKAN ROUTE

ALL OPIATES ENTERING THE BALKAN ROUTE (170 tons of pure heroin

equivalent)

26

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Box 1. Data sources

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Prevalence

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Report²²

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Consumption data

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LQWKLVVWXG\ORZHVWLPDWHKLJKHVWLPDWHJUDPVRISXUHKHURLQ7KLVYDOXHLVWKHDYHUDJHRI

different estimates of per-user annual consumption.

An annual per-user consumption of 757

JUDPVRIRSLXP

is considered in this study.

Retail, wholesale and international trade

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Seizure data

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Conversion of opium to pure opiate equivalents

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22 UNODC, World Drug Report, various years. Data available at https://data.unodc.org.

23 EMCDDA, http://www.emcdda.europa.eu/.

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27 EMCDDA, Pilot Study on Wholesale Drug Prices in Europe (Lisbon, 2011).

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29 UNODC, World Drug Report, various years. Data available at https://data.unodc.org.

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Price data

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of opiate users

by per-user annual consumption of opiates.

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of per-user annual consumption.

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Box 2. Demand-side estimates

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demand-side approach.

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related to the estimation of both prevalence and per-user consumption.

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adult population in the same year.

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applied to all countries.

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38,ELG812'&DQG,VODPLF5HSXEOLFRI $IJKDQLVWDQ0LQLVWU\RI &RXQWHU1DUFRWLFVAfghanistan Opium Survey 2010, 2011, 2012 (Vienna:, 2010, 2011, 2012).

Table 1. Estimated heroin and opium consumption in the Balkan route countries/territory (kilograms of pure illicit opiates), 2009-2012 average

Annual Prevalence

+HURLQFRQVXPSWLRQNLORJUDPV Opium consumption NLORJUDPVRISXUHKHURLQ

HTXLYDOHQW estimate Low Best

estimate +LJK

estimate

Albania 0.45% 331 416 511 -

Austria 0.45%    -

%HOJLXP 0.20%  623 764 -

%RVQLDDQG+HU]HJRYLQD 0.30% 285 358  -

%XOJDULD 0.51%    -

Croatia 0.36% 362 455  -

&]HFK5HSXEOLF 0.15%  477 585 -

'HQPDUN 0.52% 661 830  -

France     -

*HUPDQ\ 0.40%    -

*UHHFH  737   -

+XQJDU\ 0.05% 120 150 185 -

Iran (Islamic Republic of) 2.27%    

Ireland 0.72% 740   -

Italy 0.45%    -

.RVRYR 0.40% 164 206 253 -

/X[HPERXUJ  67 84 104 -

I<5RI0DFHGRQLD 0.50% 255 321  -

0RQWHQHJUR 0.36% 53 66 82 -

Netherlands 0.13% 505 635  -

Norway 0.30% 332 417 512 -

Poland 0.10%    -

3RUWXJDO  704 885  -

Romania 0.11% 532  821 -

6HUELD 0.28% 485  748 -

6ORYDNLD 0.13% 176 222 272 -

6ORYHQLD 0.44% 218 275 337 -

6SDLQ 0.23%    -

6ZHGHQ 0.23%  618 758 -

6ZLW]HUODQG 0.53%    -

7XUNH\ 0.03% 524   -

8QLWHG.LQJGRP 0.81%    -

Balkan route  92,121  

Note: different assumptions on per-user annual consumption of illicit opiates determine the three estimates.³⁸ The quantity consumed is given by the number of users multiplied by the per-user annual consumption.

Source: elaboration on UNODC and EMCDDA data.

39-RQDWKDQ&DXONLQV´3ULFHDQG3XULW\$QDO\VLVIRU,OOLFLW'UXJ'DWDDQG&RQFHSWXDO,VVXHVµHeinz Research, May 24, 2005, http://repository.

FPXHGXKHLQ]ZRUNV

40812'&DQG,VODPLF5HSXEOLFRI $IJKDQLVWDQ0LQLVWU\RI &RXQWHU1DUFRWLFVAfghan Opium Survey 2014 (Vienna, 2014).

41.LOPHUDQG3DFXOD´(VWLPDWLQJWKH6L]HRI WKH,OOHJDO'UXJ0DUNHW$'HPDQG6LGH$SSURDFKµ812'&The Global Afghan Opium Trade (Vienna, 2011).

423DROL*UHHQÀHOGDQG5HXWHU7KH:RUOG+HURLQ0DUNHW, 95.

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44 Whenever the reported or imputed purity levels at the street level are higher than those at the wholesale level, the data are inverted.

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Box 3. Estimating purities

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unware of the purity of the substances they buy.

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A comprehensive series of data on heroin purity is available to UNODC.

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incoherent for some countries

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criteria outlined below).

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30

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Table 2. Annual seizures of opiates in the Balkan route countries/territory (converted to kilograms of pure heroin equivalent), 2009-2012 average

Heroin Opium in pure

heroin equivalent Total Retail Wholesale International trade

Albania 0.01 0.08 24.28 - 24.37

Austria   46.33 11.03 60.45

%HOJLXP 0.37 3.10  0.33 130.74

%RVQLDDQG+HU]HJRYLQD 0.04 0.23 7.48 - 7.75

%XOJDULD 0.16 1.75 261.25 0.42 263.57

Croatia 0.12 0.81  - 

&]HFK5HSXEOLF 0.06 0.43 7.57 - 8.06

'HQPDUN 0.16 1.40 18.21 0.08 

France 2.07 20.47  0.34 317.34

*HUPDQ\   247.23 4.12 272.04

*UHHFH 1.34   0.21 254.14

+XQJDU\ 0.12 0.60  0.41 20.25

Iran (Islamic Republic of) 30.20    

Ireland  2.32 24.76 - 27.47

Italy 5.08 28.04 451.27  484.77

.RVRYR 0.13 0.82 24.37 - 25.32

/X[HPERXUJ 0.01 0.06 7.37 - 7.44

I<5RI0DFHGRQLD 0.08 0.60  - 

0RQWHQHJUR 0.00 0.02 4.26 - 4.28

Netherlands 0.70 3.27 340.42  365.18

Norway 0.28 3.43  0.03 

Poland 0.01 0.06 10.38  13.43

3RUWXJDO 0.48 3.00 32.33 0.00 35.81

Romania 0.63 3.26 23.37 0.18 27.45

6HUELD 0.15 0.83 7.60 - 8.58

6ORYDNLD 0.01 0.15 1.67 - 1.83

6ORYHQLD 0.02 0.11 8.78 0.02 

6SDLQ 2.15 12.03 162.71 0.05 

6ZHGHQ 0.20 1.46  1.66 20.61

6ZLW]HUODQG 0.82 5.71 87.38  

7XUNH\ 1.45   31.21 

8QLWHG.LQJGRP  55.41 722.84 - 787.37

Balkan route     

Source: Elaboration on UNODC and Rossi and Ricci data.

Figure 6.1. Heroin seizures in the Balkan route countries/territory (tons of heroin; not purity adjusted), 2000-2012

Note: “Other countries/territory” are Albania, Austria, Belgium, Bosnia and Herzegovina, Croatia, Czech Republic, Denmark, Hungary, Ireland, Kosovo, Luxembourg, Montenegro, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland and the former Yugoslav Republic of Macedonia.

Source: based on UNODC data.

Bulgaria Turkey

The Netherlands Italy

Greece United Kingdom

Germany

Other countries

France

20 40 60 80 100 120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Bulgaria Turkey

The Netherlands Italy

Greece United Kingdom

Germany

Other countries

France Islamic Republic of Iran

0 5 10 20 30

15 25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Figure 6.2. Focus on heroin seizures in the European Balkan route countries/territory (tons of heroin; not

purity adjusted), 2000-2012