organized crime and illicit trade in europe by michele riccardi & francesco calderoni,...

Transcrime – Joint Research Centre on Transnational Crime

Università Cattolica del Sacro Cuore | Università degli studi di Trento

www.transcrime.it

Michele Riccardi & Francesco Calderoni

Organized Crime and Illicit Trade in Europe

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Transcrime’s research agenda:

• Estimating organised crime & illicit trade

• Mapping routes & flows

• Identifying actors & modus operandi

Key targets:

• Developing innovative methodologies

• Improving policies with a focus on the

reduction of opportunities

Transcrime on O.C. and illicit trade

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RECENT RESULTS ON

O.C. AND ILLICIT TRADE IN EUROPE

The size of the illicit trade in Europe

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• Project OCP – Organised Crime Portfolio

• Study of the economics of OC in Europe

• Starting point: where do OC proceeds come from?

Analysis of illicit markets:

• Revenues

• Impact on EU MS

• OC actors involved

• Emerging trends

• High-risk areas and markets

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• Different markets Different methodologies

• Lack of data wide range of sources and information

• Data on consumption

• Data on prices of both illicit and legal goods

• Data on revenues of legal sectors/markets

• Data on seizures

• Qualitative information from:

• Judicial files

• LEA/FIU/Customs reports

• Other reports

• Further details: Final report and Methodological annex

(www.ocportfolio.eu)

Methodology

http://www.ocportfolio.eu/





Estimates of illicit markets in Europe

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Source: Transcrime-Project OCP estimates. In italics estimates by other authors.

www.ocportfolio.eu

Illicit revenues in the EU per year (billion euro)

Illicit market Revenues

Illicit drugs 27.7

Heroin 8.0

Cocaine 6.8

Cannabis 6.7

Amphetamines 2.8

Ecstasy 3.5

Illicit trafficking in firerarms (ITF) 0.4

IIllicit trade in tobacco products (ITTP) 9.4

Counterfeiting 42.7

VAT carousel fraud 29.3

Cargo theft 0.42

TOTAL 109.9


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Absolute value - million euro

Source: Transcrime – Project OCP (www.ocportfolio.eu)


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% of GDP 2010

Source: Transcrime – Project OCP (www.ocportfolio.eu)


• Shift of OCGs to new profitable activities, e.g.:

• Fraud

• Organised theft (e.g. of medicines, metal, fuel, car parts)

• Involvement of legitimate businesses, e.g.:

• In fraud schemes

• As fronts for illicit trade

• To ‘launder’ stolen products

• New products in the twilight zone between licit and

illicit (e.g. illicit whites or firearm replicas)

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Main findings

Policy implications

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• Improved tracing of the origin of illicit investment

(Follow the money)

• Clearer assessment of the impact of proceeds of

crime on the legal economy

• Better identification of the regions suffering the

highest harm

• Identification of opportunities offered by emerging

markets to

• reduce opportunities (e.g. better regulation, controls)

• focus prevention and law enforcement (in time & space)

WHY WE NEED TO BE CRIME SPECIFIC?

INNOVATIVE METHODOLOGIES FOR CHARTING THE ILLICIT CIGARETTE MARKET

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The European Outlook on the ITTP

Goal

Provide data & analyses for reducing the opportunities for illicit

tobacco

Innovative approach:

• Estimating the size & products of the ITTP at the subnational level

• Mapping the flows of the ITTP

• Exploring the actors and modus operandi

• Analyzing the law enforcement actions

• Covering the 2006-2013 period

Project co-financed by Transcrime and PMI, 2014

Full report at http://www.transcrime.it/pubblicazioni/european-outlook/

http://www.transcrime.it/pubblicazioni/european-outlook/




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Methodology

Estimates of the size, products and proceeds of illicit cigarettes

• National estimates from KPMG Project Sun

• Disaggregation at the subnational level according to:

• Smoking prevalence

• Empty pack surveys data

• Despite the limitations, best available data

Flows, Actors & Law enforcement actions

• Content analysis of grey literature & open sources (approx. 6,500

sources collected)

• First time comprehensive analysis

Full details in the methodological annex at http://www.transcrime.it/wp-

content/uploads/2015/01/Methodological-Annex.pdf

http://www.transcrime.it/wp-content/uploads/2015/01/Methodological-Annex.pdf






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The size of the illicit cigarette market Midpoint estimates, million € (2013)

Proceeds between €7.8

billion and €10.5 billion

per year (2006-2013)

Comparable to the cocaine

or heroin markets

Source: Transcrime, The European Outlook on the ITTP, 2015

15 Source: Transcrime estimates/elaborations

Prevalence of illicit cigarettes million sticks per 100,000 inh.

2006 2007 2008 2009 2010 2011 2012 2013



2006 2007 2008 2009 2010 2011 2012 2013

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The products % the illicit cigarette markets (2013)

Illicit whites

Counterfeit Other illicit


The flows by frequency number of cases reported (2010-2013)

• Geographic proximity between starting and ending points

• Flows from countries producing illicit whites and counterfeits

24 Source: Transcrime, The European Outlook on the ITTP, 2015

Large-scale actors (23.0%)

the largest ITTP share (94.8%)

Small-scale actors (51.4%)

the smallest ITTP share (1.2%)

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Number of actors and share of illicit

cigarettes by type of actors

Actors N=7,398, seizures N=6.8bn sticks. 2010-2013


The actors Large, medium and small scale actors

Increase in the scale

of crime = increase in

the age of actors

Large-scale ITTP:

senior and more

experienced criminals

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Age of actors per type

(N=1,994) (2010-2013)


The actors Age profile

Cigarettes seized and share of seizures out of the total illicit cigarettes

• Significant challenge for law enforcement

• Seizures = approx. 7% of the illicit market

• Weak deterrence of traditional law enforcement approaches

27 Source: Transcrime, The European Outlook on the ITTP, 2015

EU, bn sticks, % (2007–2013)

The law enforcement actions

Conclusions

The future challenges for charting illicit trade

• Addressing measurement issues better data collection

• Moving beyond national estimations subnational level

• Ensuring continuity yearly estimates

• Distinguishing by types of products proper classification

How these findings affect policies?

• Improving prevention reduction of opportunities

• Improving law enforcement action focus on large-scale actors

• Improving regulation prevention of asymmetries

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Transcrime – Joint Research Centre on Transnational Crime

Università Cattolica del Sacro Cuore | Università degli studi di Trento

www.transcrime.it

Michele Riccardi & Francesco Calderoni

Organized Crime and Illicit Trade in Europe

organized crime and illicit trade in europe by michele riccardi & francesco calderoni,...

Government & Nonprofit

illicit revenues

illicit trafficking

illicit whites

analysis of illicit

illicit cigarette market

origin of illicit investment

transcrime project ocp

emerging markets