TERRORISM AND TRANSNATIONAL

ORGANIZED CRIME: THE POLITICAL

ECONOMY OF ORGANIZED CRIME AND
STATE FAILURE: THE NEXUS OF GREED,
NEED AND GRIEVANCE
Abstract
Increasingly since the end of the Cold War and the subsequent decline of state sponsorship for terrorism,
organised criminal activities have become a major revenue source for terrorist groups worldwide. Building
on the precedent set by narco-terrorism, as it emerged in Latin America in the 1980s, the use of crime has
become an important factor in the evolution of terrorism. As such, the 1990s can be described as the decade
in which the crime–terror nexus was consolidated: the rise of transnational organised crime and the
changing nature of terrorism mean that two traditionally separate phenomena have begun to reveal many
operational and organisational similarities. Indeed, criminal and terrorist groups appear to be learning
from one another, and adapting to each other’s successes and failures, meaning that it is necessary to
acknowledge, and to understand the crime–terror continuum to formulate effective state responses to these
evolving, and periodically converging, threats. Analyses on Organized Crime and Terrorism have for a long
time been conducted by different research communities. Only in the 1980s, when illicit drug production and
trafficking were found to finance terrorist campaigns, a first beginning was made to look at both phenomena
simultaneously. However, the nature of the relationship has been a matter of controversy. While some
authors see close links and even convergence, others are more sceptical, pointing to the fact that a relatively
small sample of groups are constantly referred to, with little in-depth investigation. The authors hold that
painstaking empirical research should be the arbiter of the controversy. For this purpose, they formulate ten
key questions which such research should explore to settle the issue. State failure has emerged as a new
security threat, however its dynamics are poorly understood as evidenced by our limited insight of its
relationship to proximate causes such as organized crime. Most theories of conflict and state failure that
incorporate organized crime focus on its ability to finance war and provide economic incentives to sustain
instability; however, they ignore the political elements that are present in theories of organized crime.
Moreover, it is difficult to discern the difference between crime as a symptom of state failure and crime as
an agent of it. The central question posed in this paper concerns how organized crime interacts with the
causes of state failure. Applying a political economy analysis to the drug trade in Afghanistan and
Tajikistan as case studies, the purpose of the study is to determine whether or not organized crime is a
neutral symptom of state failure or if it contributes to the process of disintegration. The findings reveal that
organized crime serves as a proximate cause of state failure by feeding off of and reinforcing other causes in
a manner that propels weak states towards failure and provides obstacles to the re-establishment of a
functional state. This suggests that policy-makers should also approach the problem from a political
economy perspective, taking care to isolate the greed aspect of organized crime without exacerbating the
legitimate need and grievances of citizens that it exploits and seeks to reinforce. To do so requires an
expansion of the traditional toolbox for conflict management beyond traditional military and development
instruments to include intelligence and law-enforcement agencies. The evolving relationship between terrorism
and crime poses significant challenges to the international community, and is contingent on definitions of terrorism,
petty crime and organised crime, which are often contested. In Europe there is evidence that there is a link between
petty crime and terrorism, where individuals on the margins of society and the formal economy or in prison are most
vulnerable to radicalisation. In other areas of the world, the relationship between organised crime and terrorism has
transformed to one of symbiosis and convergence, in which it has become increasingly difficult to draw a meaningful
distinction. Activities of terrorists and organised criminals frequently reinforce each other, where terrorists engage
either directly or indirectly in organised crime activities such as trafficking, smuggling, extortion, kidnapping for
ransom and the illicit trade of natural resources, for financial and/or material benefits. Such benefits contribute to
undermining state security, stability and social and economic development, which in turn may create or maintain the
conditions for organised criminal groups to flourish. On the other side, organised crime groups may employ terrorist
tactics, including the strategic use of violence, to enable their objectives. In designing an appropriate policy response,
there is value to recognising that there is a strategic distinction to be made between those situations where causal and
enabling conditions for organised crime and/or violent extremism converge and where monitoring and preventive
action is possible, versus those situations where the relationship is already in place, and where situation specific
approaches are required. The global war on terrorism is constricting the flow of financial support to terror groups.
To circumvent these measures, transnational terrorist organizations are moving deeper into organized criminal
activity. This transition poses a tremendous challenge to states struggling with a threat that has changed significantly
since September 11. As terror groups transform into hybrid criminal/terror entities and partner with criminal
syndicates, the threat to the United States and other nations rises in complexity, demanding a highly flexible, tailored
response.

Executive Summary

Security Council Resolution 2195 (2014), Threats to international peace and security, called upon states to
better understand and address the nexus between organized crime and terrorism as a threat to security and
development. This resolution comes as the culmination of 15 years of consideration by the United Nations
the General Assembly and the Security Council on the interaction of terrorism and cross-border crime and
its impact on international peace and security. In line with this resolution, the United Nations Interregional
Crime and Justice Research Institute (UNICRI) and the Thailand Institute of Justice (TIJ) hosted a meeting
from 11-13 May 2016, in Bangkok, to examine the nexus between organised crime and terrorism as a threat
to security and development and to define better policy and programmatic responses. The meeting brought
together representatives of 15 States and international experts with specialised knowledge of organised
crime and terror groups in a number of different regional contexts. The participants were challenged to
review the current evidence basis and conceptual theories around the nexus, to test them against their own
areas of expertise, and to draw from their knowledge of lessons learned and best practices to propose a series
of programme priorities.

The prevailing orthodoxy in criminology and terrorism studies maintains that the fundamental distinction
between criminal and terrorist organisations lies in their disparate motivations: terrorists are primarily
motivated by ideology, whilst criminals are motivated by profit. Recognition of a “crime-terror nexus” has
appeared in the literature for the past two decades, but the vast majority of discussions are confined to
organisational and operational similarities between terrorist and criminal groups. Such limited explorations
of convergence perpetuate the notion that, while they may adopt similar traits between each other, their
raisons d’etre remain fundamentally different. This dissertation seeks to answer the following: What are the
misconceptions in the analysis of the crime-terror nexus in regards to militant Islamist groups? Additionally,
what role does ideology have in modern Islamist terrorist groups today? Finally, is ideology the fundamental
motivation of Islamist terrorist groups? The answering of these questions will ultimately divulge whether the
crime-terror nexus threat needs reassessment.

Organized crime and terrorism are usually viewed as two different forms of crime. Organized crime is
generally held to focus mainly on economic profit and on acquiring as much of an illegal market share
as possible, while terrorism is said to be motivated chiefly by ideological aims and by a desire for
political change. The word ‘terrorism’ is not even mentioned once in Abadinsky’s handbook (1990) on
Organized Crime, while in his influential study Political Terrorism, P. Wilkinson (1974: 33) wrote, “We
shall exclude from our typology criminal terrorism which can be defined as the systematic use of acts of
terror for objectives of private material gain". As a result of this distinction between organized crime and
terrorism, two separate bodies of criminology literature have emerged. Research into each is funded by
different programmes, and information about each is taught in different courses. Whatever is discovered by
crime investigation specialists who scrutinize both phenomena tends to be kept confidential and their
knowledge and insights are not widely shared. During the past 15 years, technological innovation and
globalization have proven to be an overwhelming force for good. However, transnational criminal
organizations have taken advantage of our increasingly interconnected world to expand their illicit
enterprises.

Today’s universe of organised criminal activities and of the individuals, groups and networks involved in
them is virtually infinite. Spanning the whole globe, organised criminal operations range from illegal
protection economies and extortion rackets to cybercrime, oil theft, money laundering, counterfeiting,
maritime piracy and the trafficking and/or smuggling of illicit drugs, humans, firearms and wildlife. In 2009,
the UN Office on Drugs and Crime (UNODC) estimated that transnational organised crime generated $ 870
billion, the equivalent of 1.5% of global gross domestic product (GDP). All criminal proceeds worldwide
amounted to an estimated 3.6% of global GDP, equivalent to about $2.1 trillion.

Organised crime is not an “alien”, external threat. Criminal operations are planned, designed and
implemented by mafia bosses, drug kingpins, paramilitary and insurgent commanders, warlords and gang
leaders ‒ but also by, and with, politicians, military and police officers, civil servants, investment bankers
and accountants, among representatives of many other professions.

Over the past few years and increasingly in recent months, leading intelligence and national security minds
have noted the growing threat created by the transformation and convergence of transnational organized
crime and terrorist groups. While there is some debate as to whether these groups are “converging” or
“transforming,” it is clear that this growing threat is complex and increasingly difficult to counter with
standard law enforcement and military counter-measures. As the United States and other nations adjust to
the post 9-11 world of stubborn problems such as the Iraqi insurgency, Afghanistan, and al Qaeda, the nexus
of organized crime and terrorism could prolong these challenges and lead to further disruptions and threats
to global security and prosperity. Impediments to wholesale cooperation between the two parties remain, and
many terrorist groups will never partake in organized criminal activities, but the merging of transnational
organized crime and international terrorism is nonetheless on the rise.

Transnational organized crime and international terrorism increasingly share both organizational and
operational characteristics, and at times even partner with one another. In general, there is agreement among
national security, crime and terrorism analysts regarding the factors that create and sustain this threatening
phenomenon. Transnational organized crime and international terrorism increasingly share both
organizational and operational characteristics, and at times even partner with one another. In general, there is
agreement among national security, crime and terrorism analysts regarding the factors that create and
sustain this threatening phenomenon. Over 100 countries are cooperating in the global war on terrorism, and
are trying to close down sources of terrorist funding. To replace this revenue and the financial support from
states that are now unable or unwilling to back them, terrorist groups look elsewhere for financing.

This crackdown on terrorist financing has led some terrorists to transform their organizations by creating
“in-house” criminal capabilities in order to generate revenue; these units then engage organized crime
groups to meet financial and operational needs. Transformation, which U.S. intelligence analyst Chris
Dishman describes as the situation in which a terrorist group’s financial needs match or override traditional
political motivations, leads those groups to mimic or ally with organized crime groups that have successfully
executed profitable, illicit cross-border activities over long periods of time. While terrorists are accustomed
to receiving support from second parties, organized crime groups’ raison d’etre is criminal activity for
revenue generation.

Conventional law enforcement and security approaches to tackling organised crime are insufficient, and at
times also unrealistic and counterproductive. Such approaches are not useful where states do not have
sufficient law enforcement capacity and do not hold the monopoly on the use of force. Things are
complicated further because in such settings the rule of law is weak or non-existent, corruption and human
rights violations are rife, and political and social institutions, both formal and informal, are not separated by
the membrane of legality from organised criminal activities. Wider society—affected by rampant
inequalities in income and well-being—may not even consider such activities illegitimate. The evidence
shows that conventional law enforcement and security approaches can have unintended consequences for
security, governance, social cohesion and so on, including by boosting violence and disrupting the fragile
political equilibrium between criminal organisations and state agents.

The first approach and challenges the current notions in the crime-terror nexus, many of which are deeply
rooted in the “profit-versus-ideology dichotomy”. An organisational analysis reveals that Islamist terrorist
groups both engage in alliances with transnational criminal organisations and pursue their own criminal
enterprises despite ideological commitments. Criminal networks are not only expanding their operations, but
they are also diversifying their activities, resulting in a convergence of transnational threats that has evolved
to become more complex, volatile, and destabilizing. These networks also threaten state. interests by forging
alliances with corrupt elements of national governments and using the power and influence of those
elements to further their criminal activities. In some cases, national governments exploit these relationships
to further their interests to the detriment of the country.

Although generally having been thought of as distinct threats, the interplay between terrorism and
transnational organised crime (TOC) is evolving. Once regarded as simply co-existing, TOC and terrorist
activities have the effect of reinforcing one another, transforming their relationship into one of symbiosis, in
which it is increasingly difficult to meaningfully distinguish between the two. Indeed, terrorists may engage
either directly or indirectly in criminal activities such as trafficking, smuggling, extortion, kidnapping for
ransom (KFR) and the illicit trade of natural resources, for financial and/or material benefits. Such benefits
contribute to undermining state security, stability and social and economic development, which in turn may
create or maintain the conditions for organised criminal groups to flourish.

A further step into this evolution may be seen when terrorist organisations and criminal networks seem to
converge, oscillating between objectives and modalities that were once thought uniquely “terrorist” or
“criminal”. Although the international community has addressed the OC-terrorism nexus in a number of
instruments and actions, ironically, defining what constitutes “terrorism” and “organised crime” continues to
be a challenge. Moreover, the discord in defining the phenomena can also be seen in evolving discussions
over the links between terrorism and organised crime as well, which must be acknowledged as varying
between regional contexts. These discussions have been made all the more complex with the rise of the
individuals with criminal backgrounds taking on the roles of terrorists, absent a traditional organised
criminal structure.

In many regions, organized criminal groups have become so entrenched and governments so corrupt, that
arrest and prosecution is at worst impossible and at best a distant concern. Transnational organized crime
groups do not enjoy state sponsorship (with notable exceptions such as North Korea) or territorial protection,
and frequently have developed a virtual corporate structure from the outset. Such organizations provide
excellent models for the evolving, loosely affiliated cell structures of terrorist groups such as Al Qaeda.
Even terrorist groups that enjoy state sponsorship, such as Hezbollah, which is supported by generous
subsidies from Iran, rely increasingly on international criminal activity to sustain their programs and
improve their operational capabilities. A wider reflection of this problem is seen in an examination of the
U.S. State Department’s list of designated foreign terrorist organizations (FTOs), which reveals that
fourteen of the thirty-six FTOs now traffic in narcotics.

While the interest in the relationship between organized crime and terrorism is a relatively new focus of the
international community, specialists in the field have developed frameworks depicting crime-terror
relationships; specifically, the crime-terror continuum theory put forth by Tamara Makarenko and
frameworks developed by Louise Shelley. Of note, both Makarenko and Shelley state that there has been a
significant transformation in international terrorism since the end of the Cold War, with the decline of state
support pushing terrorist organizations to turn to crime to fund their ideological campaigns. As such, while
the crime-terror nexus is a relatively recent phenomenon, largely taking hold since the 1990’s, both of these
analysts identify an increasing convergence of the two groups in important ways.

Makarenko predominantly analyses the ideological and operational nature of the convergence. She depicts
the relationship between organized crime and terrorism as a continuum, arguing that a single group can slide
up and down the scale depending on the environment in which it operates. The two types of relationships
that constitute the major components of the nexus are the formation of alliances between criminal and
terrorist organisations (alliances) and use of crime by terrorist groups as a source of funding (operational).
However, Makarenko states, the relationship between organised crime and terrorism has evolved into
something more complex. As both criminal and terrorist groups incorporated economic and political
capabilities into their remit, many groups lost sight of their original motivations and aims. Makarenko
argues that the realisation that economic and political power enhance one another and suggests that groups
will increasingly become hybrid organisations. This possibility is increased by the fact that criminal and
terrorist groups appear to be learning from one another, and adapting to each other’s successes and failures.
Louise Shelley refined this thesis by observing that it is insufficient to examine organised crime and terror
groups in isolation, or only in comparison to each other. They also must be understood in terms of the
association with the state, and increasingly they are converging to form the ‘Unholy Trinity’ where, through
corruption and complicity of state actors, criminal and terrorist groups grow in symbiosis with state
institutions.

Mark Shaw put forward a third means by which to analyse the nexus between organised crime and terror
groups, based upon their strategic use of violence. He argued that while the use of violence often is used as
the defining feature of a terrorist group, in fact organised crime groups also use violence as a strategic way,
and one that is not dissimilar to terrorist groups. Firstly, they use symbolic violence and killing to send
messages about local authority and control; secondly that innocent victims often are subject to criminal
violence; and finally, like terrorist groups, the goal of organised crime’s use of violence is often to influence
political decision-making around the allocation of resources.

The experts on this subject like to assess the continuum or convergence along four axes:

i. Transactional, where there are operational linkages between the groups, such as financing,
procurement of arms and control of territory;
ii. Ideologies and aims, where the goals of the group are identified according to their objectives;
iii. Relationship to and nature of the state, where the groups can be assessed upon the degree to
which they align with or distinguish themselves from the state; and finally,
iv. Strategic use of violence, where the nature and use of violence can be used to analyse the nature
of the organised crime and terrorism nexus.

Integrated approach

Accepting that conventional law enforcement and security approaches to tackling organised crime are
insufficient (and at times also unrealistic and counterproductive) and recognising that the evidence shows
that such approaches can have unintended consequences, such as promoting violence and deepening poverty,
a question arises as to the alternative. Some development actors are moving towards integrated approaches,
which address organised crime as a complex matter and aim to combine law enforcement and security with
diplomatic and development actions. The basic idea is that law enforcement, justice and security
interventions are used as discrete tools in a broader effort to limit the harm caused by organised criminal
activities in developing countries. This point is driven home by Ellis and Shaw, who argue with respect to
contemporary Africa (though this also applies to some countries in Asia and Latin America), that
“understanding the meaning in African contexts of the type of large-scale, political-criminal
entrepreneurship that we have evoked will increasingly drive both internal and external policy discussions
[…]. What is clear […] is that law enforcement interventions alone will do little to make a difference” (Ellis
& Shaw, 2015: 528).

Integrated approaches address organised crime as a complex matter and aim to integrate law enforcement
and security with diplomatic and development actions. Law enforcement, justice and security interventions
are necessary, but need to be used as part of a broader effort to rein in organised criminal activities in
developing countries and limit the harm they cause.

The development of integrated approaches is key, but remains a work in progress. The following four
issues need to be addressed.

1) We need to determine whether development programming in crime-permeated settings should prioritise:

a) supporting law enforcement/security efforts to contain the spread of organised crime and/or prevent
its emergence; or
b) whether programming should prioritise protecting development processes from the negative effects
of organised crime. These are two essentially different forms of engagement
2) International development actors will need to review basic operating procedures, tools and mandates to
be able to design and implement effective programmes in organised crime-permeated development
settings and prevent the “securitisation” of crime sensitive development interventions. They will also
 need to increase their capacity to conduct in-depth political economy analyses of crime-permeated
development settings that systematically factor in the element of organised crime.
3) Introducing a strategic focus on organised crime is not entirely congruent with the Sustainable
Development Goals. Crime-sensitive development actors will need to increase their efforts to build a
strong coalition of international development agencies to pursue this cause effectively.
4) The international development community will need to engage more forcefully with:
a) reforms in the banking, tax and foreign trade sectors of high-income countries; and
b) reforms of global governance mechanisms, such as the UN-administered international drug control
regime.

Second, what types of development programmes should be prioritised as part of an integrated approach? The
big challenge here is that organised crime is today such a far-reaching, encompassing and multifaceted
phenomenon. It transcends the boundaries of national jurisdictions, is globally networked and has economic,
political, social and (human) security implications. In all likelihood, international development actors would
need to review basic operating procedures, tools and mandates to acquire the capability to design and
implement effective programmes in organised crime-permeated development settings. In this regard, Ellis
and Shaw suggest that the “key function of development interventions must be to change the incentive
structures” that underpin the illegal-criminal protection economies in developing countries. “Indeed”, the
authors conclude, “this may be all that development interventions are able to do” (Ellis & Shaw, 2015: 528).

Third, there are strategic trade-offs involved in an integrated development response to organised crime.
Perhaps the most obvious one is the diverging aims and interests of development and law enforcement
/security actors, as witnessed in armed/post-conflict settings like Afghanistan, Haiti and Iraq. There is no
reason to believe that these tensions would not also boil up in the context of integrated interventions in
organised crime-permeated settings (which are often also affected by armed conflict or locked into complex
and uncertain war-to-peace transitions). Moreover, introducing a strategic focus on organised crime, while
certainly important in many developing countries, would not be entirely congruent with the SDGs. Crime-
sensitive development actors would have to increase their efforts significantly to build a strong coalition of
international development agencies to pursue this cause. Yet, it is not clear who would be the developing
country counterparts who would cooperate with international development agencies on organised crime
issues. Neither is it clear whether high-income countries would be prepared to reform their banking and
foreign trade sectors, as well as global governance mechanisms such as the UN-administered international
drug control regime, which are inadvertently boosting organised crime around the globe (see, for instance,
Bewley-Taylor, 2005)

It is important for development agencies to recognise that “understanding in this area is difficult from the
outset, unlike health or education-related work, for example”; and that, as “newcomers” in this field,
development donors have few tested policy responses to build on. By the same token, in a manner similar to
the earlier debates about how (and whether) development interventions could be linked to and support
security strategies in fragile and conflict-affected states, development actors will have to tread carefully with
respect to engaging with organised crime and strategies to counter it. Considering the broad range of
challenges involved, some of them very serious, there is certainly more than a grain of truth to the
observation that.

A combination of the extent of the impact of organised crime, but also the acknowledgement that many of its
causes relate to a wider set of governance, social, developmental and other factors, has highlighted
incontrovertibly that a narrow security approach will not be effective in countering the problem. If an
effective and sustainable solution to organised crime is to be found, it is imperative that the weight of the
development response is brought to bear (Global Initiative, 2016: 2).

The key question that then arises is how a development response can be brought to bear and make a
difference in a complex, fast-evolving and not well-understood policy field that traditionally has been
dominated by law enforcement and security actors and agendas, and where there is little evidence on what
actually works or could work. A milestone on the road of the development community’s engagement with
organised crime, the World Bank’s 2011 World Development Report on conflict, security and development
approaches the issue by linking what it calls “large-scale, organized crime” to the persisting and even
increasing insecurity of a quarter of the world’s population: “insecurity not only remains, it has become a
primary development challenge of our time. One-and-a-half billion people live in areas affected by fragility,
conflict, or large-scale, organized criminal violence. […] New threats – organized crime and trafficking,
civil unrest due to global economic shocks, terrorism – have supplemented continued preoccupations with
conventional war between and within countries” (World Bank, 2011: 1).

The relationship between development and organised crime has at least two dimensions: development
interventions can help contain and/or prevent the emergence and spread of organised criminal activities and
groups; and they can seek to protect development processes from being negatively affected by organised
crime. In the first type of intervention, development is a function of counter-crime measures, at least in part.
In the second type, it is the object of intervention that needs to be protected against the corrosive and
debilitating effects of organised crime on development processes. As in the case of the relationship between
development and violent conflict, in practice both types of interventions overlap and are ideally mutually
reinforcing. This approach has recently been articulated by Shaw, Reitano and Hunter of the Global
Initiative against Transnational Organized Crime Secretariat (Global Initiative, 2016): " This framework is
an attempt to shift to a situation where development actors are proactively acknowledging and addressing
crime and criminal actors in their work, recognising that while not all interventions may be directly targeted
at organised crime itself, [… they] may require working in environments where criminal actors and the
externalities of their presence are increasingly a feature of the programming landscape. […] This
framework is therefore equally as relevant for organised crime specific programming, as well as organised
crime relevant measures (Global Initiative, 2016: 22)."

What sets this approach to programming apart from law enforcement and other strategies that essentially
aim to re-establish security is that it frames organised crime not as some sort of external threat that has to be
minimised or neutralised. Rather, organised crime is perceived as reflecting a set of diverse societal and
developmental challenges—increasingly linked to global issues—that can be addressed effectively only if
they are tackled together and not in isolation from one another. Such challenges include, for instance,
protection economies that emerge in developing countries around criminal activities, such as drug trafficking
and oil theft but also human smuggling and environmental crime like wildlife poaching. Moreover, in a
similar manner to current drug policy reform debates, this perspective parts from the premise that, just as it
is impossible to conceive of a “drug-free world”, it is likewise impossible to conceive of an “(organised)
crime-free world”.

This conception of an integrated approach appears to be particularly pertinent as it “focuses less on the
modus operandi of criminal groups, but instead looks at the market in a specific locality or along a supply
chain, [mapping] the entities involved in the criminal market [and] their interrelationships and interests”
(Global Initiative, 2016: 5). In this perspective, which is in line with the framing of organised crime used in
this Topic Guide, " The study of power has […] become increasingly important in the analysis of organised
crime, as ‘power syndicates’ have developed whose role is to exert control over illicit business and to extract
rent from their perpetuation through protection or extortion. Accordingly, […] organised crime and criminal
enterprise can no longer be viewed as being distinct to the state or legitimate enterprise (Global Initiative,
2016: v-vi)"

Among the key proposed programming responses associated with this approach are:-

(a) direct interventions “designed to directly weaken organised crime groups or networks by reducing
their ability to operate through the arrest of people or undercutting the legitimacy of criminal actors
in the wider society;
(b) indirect interventions targeted at building the capacity of community and state actors to be resilient to
the risks posed by organised crime, including through building the integrity of state institutions and
protecting communities from criminal influence and threats: and
(c) mitigating interventions, a specific set of options related to mitigating the impact and harm of crime
in different sectors, including reducing violence and enhancing social and environmental protection
(Global Initiative, 2016: 22).
While some elements of these distinct approaches to tackling organised crime as part of developmental
efforts have been put into practice, as yet we lack any systematic assessments and evaluations of their
impact. It is beyond the scope of this Topic Guide to undertake this important pending task.
Role of ideology in the nexus

This paper introduces the second part of the framework and investigates ideology’s current role in Islamist
terrorist organisations both on membership and strategic levels. Research on radicalisation processes shows
that ideology cannot explain adequately why members join these organisations. Thus, too narrow of a focus
on ideology in the analysis of religiously motivated terrorism produces biased conclusions. Like gang
members, terrorists value a sense of purpose, identity, adventure, or seek an outlet for anger and revenge. In
summation, Islamist terrorist groups are violent gangs, and should be analysed as such. Finally, on a
strategic level, the Salafist-Jihadist ideology is actively employed as a means, rather than an end. The
ultimate aims of Islamist terrorist groups are to garner power, status, and money in fractionalised, war-torn
regions such as Syria, Iraq, Afghanistan, and parts of Northern and Western Africa.

In Africa, different groups employ contrasting models, ideologies and implications, and though affiliated to
international terrorism ‘brands’, see their operations and targets vested tightly into their local political
economy, or opportunistically exploiting traversing international illicit flows. Groups such as Al-Qaeda in
the Islamic Maghreb, Boko Haram and Al-Shabaab have taken advantage of regional dynamics, weak state
structures and widespread corruption to engage in criminal activities such as KFR, drug trafficking, and
exploitation, to parlay their activities into political influence and military and financial power, even at the
expense of moving away from their ideological aims.

In the Afghanistan-Pakistan region of South Asia (Af-Pak), local conditions provide opportunity for both
criminal and terrorists to carry out their activities. A combination of corruption, porous borders and weak
rule of law, has created an environment in which criminals and terrorists can engage in KFR, drug
trafficking and extortion to finance their organisations and networks, allowing each to engage in specific
nodes within illicit supply chains. Groups such as the Taliban and Haqqani network have been known to
cooperate in order to achieve mutual objectives, resembling organised criminal groups, motivated by a
combination of profits as well as honour, revenge and ideology.

In Turkey, a group such as the PKK (Kurdistan Workers Party) has been known to toe the line between
terrorism and organised crime, engaging in a number of illegal economic operations such as humans, drugs
and cigarettes smuggling and other forms of organised crime, including extortion and money laundering,
among its profit generating activities. In addition to funding its operations through “typical” organised
criminal activities, ISIS has added to the complexity of the nexus with the promotion of widespread
recruitment of individuals, particularly in Europe, to carry out “low-cost” attacks by self-funding through
large-scale petty crime.

Within Europe, the decline in traditional organised criminal use of terrorist tactics is being replaced with a
growing trend of individual small-time criminals carrying out terrorist attacks. The large influx of migrants
(and the challenges of their integration into European society) as well as the rise of rightwing extremism, has
led to widespread feelings of discontent and alienation, heightening the vulnerability of populations and
leading them to turn to criminal activities, the black market and the illicit economy to address their
dissatisfaction. The politicisation and remote radicalisation of criminals at the individual level (by groups
such as ISIS and other Salafi-jihadists via the internet and social media), has allowed terrorist groups to take
advantage of the restlessness and vulnerability of these individuals (who are already equipped to fund
themselves through criminal activities) to carry out their attacks abroad, regardless of borders.

Given the technical nature of interpretation and understanding of the OC-terrorism nexus thus far,
programmatic responses have thus largely focused on addressing issues related to the financing of terrorism,
strengthening the protocols through which illicit money can be earned, transferred and procured. In light of
the evolving nature of the OC-terrorism nexus however, relevant EU bodies must develop effective and
tailor-made responses to the organised crime and terrorism phenomena that address the underlying causes of
the convergence at the micro, meso and macro levels, based on a strong evidence base, engagement with
local actors, good governance, enhanced services delivery and capacity building and the incorporation of
normative frameworks

Finally the paper employs the framework in a case study on Islamic State (ISIS). It first shows that ISIS is
heavily steeped in criminal activity and operates like a criminal organisation. Second, identifying the reasons
why individuals join ISIS and demonstrating ISIS’s exploitation of the Salafist-Jihadist ideology effectively
dismantles their status as an ideologically pure group. Instead, ISIS encompasses a multi-million dollar
criminal organisation and the most dogmatic, violent, and puissant gang in the Middle East.
The profit-versus-ideology dichotomy that distinguishes between criminal and terrorist groups is misleading
when applied to modern Islamist terrorist organisations such as ISIS and al Qaeda. The Salafist-Jihadist
ideology serves as a disguise for the criminal motivations of money, power, and status. Therefore, the crime-
terror nexus threat requires reassessment in order to adapt more appropriately counter-terrorism strategies to Islamist
terrorism.

Introduction

The evolving relationship between terrorism and organised crime poses significant challenges to the
international community. Progressing from simple co-existence towards a symbiotic relationship, the lines
between these seemingly distinct activities are now becoming increasingly blurred, making it difficult to
differentiate between “pure” terrorist groups, their criminal counterparts or something in between.

Recognising this trend, the international community has addressed the nexus between OC and terrorism in a
number of instruments and actions. In 2001, the UN Security Council adopted Resolution 1373, requiring all
Member States to domestically criminalise terrorism and the financing thereof. Since that time, the counter-
terrorism bodies entrusted by the Council with implementation of Resolution 1373 (2001) have routinely
treated the potential links between terrorism and organised crime as falling within their purview. In 2014,
the UN Security Council adopted Resolution 2195, “Threats to international peace and security,” calling
upon states to better understand and address the nexus between organised crime and terrorism as a threat to
security and development.

The conceptual link between terrorism and organised crime has been made more explicit by subsequent
international action. Specific legislation or declarations have expounded on specific areas of technical
linkages:

 In 2012, the Global Counterterrorism Forum (GCTF) addressed the issue of kidnapping for ransom
(KFR) as a tool used by terrorists to finance their activities by developing the Algiers Memorandum
on Good Practices on Preventing and Denying the Benefits of KFR. This was followed in 2015,
when the GCTF adopted an Addendum to the Algiers Memorandum, providing further
recommendations relating to KFR prevention and deterrence measures.
 In 2014, the Hague-Marrakesh Memorandum on Good Practices for a More Effective Response to
the Foreign Terrorist Fighters (FTFs) Phenomenon was adopted which touches upon the impact of
FTFs, including in providing operational knowledge, raising funds and facilitating the influx of
recruits and arms.
 In 2015, UNSC Resolution 2199 underlined the obligations of Member States to take steps to prevent
terrorist groups in Iraq and Syria from benefiting from trade in oil, antiquities and hostages, and from
receiving donations.

In terms of actual programmatic responses, in 2015, the United Nations Counter-Terrorism Centre (UNCTC)
in joint cooperation with the GCTF launched the Border Security Initiative to highlight the crucial role that
border security and management play in countering terrorism, FTFs flows and cross border organised crime.
Following a series of activities that served to identify gaps and cross-border cooperation models, and explore
balancing technology based solutions and border law enforcement training, the Good Practices in the Area
of Border Security and Management in the Context of Counterterrorism and Stemming the Flow of Foreign
Terrorist Fighters was adopted in 2016 in order to inform and guide governments in developing effective
border security and management strategies within a counterterrorism and TOC context.
Despite the general recognition of a nexus between OC and terrorism, ironically, the international
community has failed to reach a consensus on the definitions of terrorism and organised crime.
Notwithstanding the lack of a universal legal definition of terrorism, specific manifestations of the
phenomenon have been criminalised and terrorist groups identified, and various regional instruments and
communities have developed their own designations. There is common accord that the general intention of
terrorist activities involves political motivations through intimidation, coercion and violence towards a
civilian population and/or a government.

Just as nebulous of a concept, organised crime can exist in many markets, and can be undertaken under the
guise of legitimate enterprises, semi-legal, state or para-state activities, as well as solely in the criminal
domain. The United Nations Convention Against Transnational Organised Crime (UNTOC) defines
“organised criminal group” as a “structured group of three or more persons, existing for a period of time and
acting in concert with the aim of committing one or more serious crimes or offences… in order to obtain,
directly or indirectly, a financial or other material benefit.” However, in the contemporary context, this
definition is not nearly as robust as it should or could be.

In theory, the distinction between terrorism and organised crime lies in their respective objectives and
modalities. Generally speaking, terrorist groups are those that deliberately challenge state authority and seek
political change through violence (or the threat of violence) for many, including ideological, reasons. For
terrorist groups, mobilising resources is viewed as an instrument to achieve their goals, rather than the goal
itself. By contrast, organised criminal groups do not aim to cause political change, but are more concerned
with profit. As such, any state disruption is aimed to create, expand or maintain conditions in order to
benefit their operations. Unlike terrorist groups which generally seek political or ideological change,
organised criminal groups seek personal financial or material benefits as the ultimate goal of their activities.

While organised crime and terrorism are marked with these theoretical distinctions, in reality such
differences may not be as clear, with both activities reinforcing one another. Terrorists may engage either
directly or indirectly in criminal activities such as trafficking of arms, persons, drugs and artefacts, extortion,
KFR and the illicit trade of natural resources and gemstones, for financial and/or material benefits. Such
benefits aid terrorist groups in undermining state security, stability and social and economic development,
which in turn may create or maintain the conditions for organised criminal groups to flourish. Likewise, OC
groups may pursue political strategies and strategically use violence to enable and protect their illicit
businesses, at times keeping state institutions at bay and in others co-opting the state through corruption and
patronage networks. Regardless of their goals and modalities, however, there is little dispute that both
organised crime and terrorism are identical in that they both present serious challenges to the legitimacy of
states and international peace and security.

In truth, despite high-level academic debate and excellent research already published on the nexus between
transnational organised crime (TOC) and terrorism, very little is known about how strong this convergence
might be. Moreover, the concept of a nexus should not be applied globally. While a nexus may exist
between groups in South Asia, no such thing may be present in North America.

There is, therefore, no “one size fits all” application of the nexus between TOC and terrorism. Indeed, there
is a marked difference in the situation in Europe and other more developed countries, and regions which are
suffering to some extent from conflict and wider developmental challenges, particularly where there is a
dearth of rule of law mechanisms and state institutions. While the nexus may exist at an extremely parochial
level in Europe, it could take on a more tactical or operational designation in parts of Central and South Asia,
as well as areas of the Middle East and North Africa. Moreover, even if the existence of a nexus was
universally accepted, there is far from anything resembling consensus on the “so what?” implications and
ways to address these implications.

In terms of responses to an OC-terrorism nexus, therefore, policymakers have tended to default to an

examination of the central aim of a particular group in a specific geographic area. In the contexts where this
is clear, the paths for policy makers and practitioners to address these threats are relatively straightforward.
Problems arises however, when the primary aims of any given group are no longer distinguishable between
the realms of organised crime and terrorism, calling for a more nuanced approach in countering the OC-
terrorism nexus. Such responses will be discussed further in this paper.

In reality, the dynamics of individual groups are driven by the local environment, available resource flows,
the policies of the state in response, as well as changes in the broader prevailing regional and international
situation. Each group (both terrorist and criminal) is unique and therefore, so are the relationships between
them. Too often, terrorist organisations and criminal groups are seen as monolithic, homogeneous entities
rather than as complex and multi-dimensional networks. The following section argues that to understand the
nexus, it is important to understand how analysis on the subject has evolved and indeed, its past, present and
future trajectory.

Definition

While definitions pose a continual challenge to policymakers and respondents, in order to grapple with the
conceptual complexities it is therefore necessary to bound the analysis presented in this paper with some
degree of specificity. There are a number of challenges in understanding the ‘nexus’ between organised
crime and terrorism, that start initially from defining these concepts, both in theory and in practice. There is
no universally agreed definition of organised crime or of terrorism, which means that there is no definitive
means by which to identify their convergences and divergences.

. For the purposes of this discussion, therefore:

a) Terrorism, will be defined as the unlawful use of violence and intimidation, especially against
civilians, in the pursuit of political aims.
b) Petty crime refers primarily to a type of crime that is not considered serious when compared with
other crimes and is usually conducted for the benefit of the individual.
c) Organised crime is serious crime planned, coordinated and conducted by people working together on
a continuing basis. Their motivation is often, but not always, financial gain.

The definition of what constitutes “organized crime” has always been a topic of heated debate. For example,
Klaus von Lampe, a renowned organized crime expert, lists no less than 180 definitions of organized crime.
Despite this variety, two dominant approaches seem to have emerged over the years:

1) studies that focus on the groups/actors that are involved in crime (organized crime groups); and
2) research that stresses the illicit activities/markets that these groups engage in (organized criminal
activities).

While both approaches are persuasive, they have different implications for policy and an almost singular
focus on the profit motive. Approaches that focus on the organizational aspect emphasize the structure of
criminal groups and lead to policies that set out to cause disruption within the organization, often by
eliminating or capturing the heads of organized crime groups. While analysts may differ in how these groups
organize (from rigid and hierarchical structures to loose networks), their understanding of “organized crime”
rests on the basis of a number of identifiable individuals connected for the purpose of profiting (mostly
economically) through illicit and criminal means.

Interestingly, the United Nations Convention against Transnational Organized Crime does not contain a
precise definition of organized crime. Instead it defines an organized criminal group as “a structured group
of three or more persons, existing for a period of time and acting in concert with the aim of committing one
or more serious crimes or offences established in accordance with this Convention, in order to obtain,
directly or indirectly, a financial or other material benefit”. Legal definitions elsewhere have largely
followed the same formula. Organized crime is thus, necessarily defined as a serious criminal activity
involving three or more people that is profit-driven.

The transnational dimension is applied when their operations extend beyond borders. Definitions that stress
the activities that organized crime groups engage in emphasize the nature and flow of illicit markets or
businesses. The idea is that organized crime is defined by the nature of the activity and not by the
organization in and of itself. Illicit activities can include the production, transportation and distribution of
illicit goods, services and people, and often have a transnational dimension. Once again, however, the
tendency is to emphasize a profit motive provoking questions as to whether serious illicit activities
perpetuated for non-economic reasons (i.e. social status, ideology) can constitute organized crime.
Approaches that adopt an activities lens place an emphasis on eliminating or limiting illicit flows through
interdiction efforts and market regulation.

Transnational organized crime groups are defined as “self-perpetuating associations of individuals who
operate, wholly or in part, by illegal means and irrespective of geography.”
–  Unlike terrorist groups, these groups are driven by economic motivation.
–  Examples of criminal activities are drug trafficking, human trafficking, money laundering, firearms
trafficking, extortion, counterfeit goods, and cyber crime.

Some authors have come to question this rigid approach and have instead proposed shining the spotlight on
illicit opportunities. The idea is to focus on understanding and tackling markets, products, services and
identities that can be criminally exploited for multiple, not just economic, purpose and effect. This approach
enables us to focus on how new criminal opportunities enabled by modern technology, political upheaval,
conflict and natural disasters provide motivation for individuals, or groups, who formerly were not
connected with criminal activity to engage in it. As Jay Albanese has demonstrated, this model has
important implications for the extent to which law enforcement agencies and public policy should focus on
surveillance of known criminal groups versus more proactive strategies to reduce criminal opportunities that
emerge from social, political, economic and technological changes. Though yet to be fully tested, this
approach holds promise for the development of a much more robust understanding of the crime-conflict
“nexus” as it is able to capture the dynamic interplay between criminal opportunities, conflict dynamics and
the ever-changing realities on the ground.

Another promising development has been the emergence of literature that approaches organized crime as a
type of “strategy” that is adopted by criminal organizations and warring parties (whether state-based or non-
state). Depending on the context and situation at play, Cockayne argues that armed groups will either adapt
criminal or political strategies, sometimes interchangeably, and sometimes with different factions within the
same group pursuing distinct strategies. Phil Williams and Vanda Felbab-Brown demonstrate how non-state
violent actors (which include gangs and transnational organized crime) employ a variety of strategies that
combine different motives, methods, and targets. In the process, these actors often develop political capital
among local populations and in some cases overtly challenge the state.

Looking at organized crime through the lens of this “strategic approach,” is particularly valuable when
applied to the crime-conflict “nexus” as it provides a helpful conceptual framework to deal with the
difficulty of distinguishing between criminal and political actors and motives in contexts of violent conflict.
Furthermore, while many approaches tend to consider criminal groups and non-state armed groups as two
different entities pursuing two distinct objectives, the “strategic approach” enables us to move beyond these
artificial binaries and understand the multiple, complex and often changing nature of illicit actors and
markets.

A new kind of war is being waged in various parts of the Americas, Africa, Asia, Europe, the Middle East,
and everywhere else around the world today.1 Some of the main protagonists are those who have come to be
designated as first-, second-, and third-generation street gangs, as well as the more traditional Transnational
Criminal Organizations (TCOs) such as Mafia families, Illegal Drug Traffickers, Warlords, Terrorists,
Insurgents, etc. In this war, TCOs are not sending conventional military units across national borders or
building an industrial capability in an attempt to “filch some province” from some country.2 These nonstate
actors are more interested in commercial profit and controlling territory (i.e., turf) to allow maximum
freedom of movement and action. That freedom within countries and across national frontiers ensures
commercial market share and revenues, as well as secure bases for market expansion. That freedom of
action also allows these criminal organizations to expand their activities from drug smuggling, to smuggling
people, body parts, weapons, and cars; along with associated intimidation, murder, kidnapping, and robbery;
money laundering; home and community invasion; and a host of other lucrative societal destabilization
activities.
What makes all of this into a new kind of war is that the national security and sovereignty of affected
countries is being impinged every day, and TCO’s illicit commercial motives are, in fact, becoming an
ominous political agenda. Thus, whether a gang or another TCO is specifically a criminal or insurgent type
organization is irrelevant. The putative objective of all these illegal entities—the common denominator that
links gangs and other TCOs-- is to control people, territory, and government, to ensure their own specific
ends. That is a good working definition of insurgency, and a serious political agenda.

Rajan Basra and Peter Neumman explore the strong nexus between crime and jihadism in Europe. With a
significant proportion of European foreign fighters having criminal backgrounds, they outline how the
Islamic State is going out of its way to depict crime as helpful to its cause and to recruit criminals for
terrorist enterprises. Throughout Europe, criminal and extremist milieus are merging, with many jihadis and
‘foreign fighters’ having criminal pasts. An individual’s criminality can affect his process of radicalization
and how he operates once radicalized. The Islamic State’s recent propaganda suggests that the group is
aware of this reality. It has positively framed the crime-terror nexus by encouraging crime ‘as a form of
worship,’ and has been lauding those from criminal backgrounds. This has been reflected on the streets of
Europe, where perpetrators have used their criminal ‘skills’ to make them more effective terrorists. While
understanding of the crime-terror nexus has developed, there are many knowledge gaps that have practical
implications for countering terrorism.

The trend is apparent throughout Europe. From Germany, 66percent of foreign fighters had police records
prior to travelling, according to Federal Police analysis of 778 jihadis. In the Netherlands, 64 percent of 319
jihadis—comprising foreign fighters, failed travellers, and those identified as potential travellers—have been
subject to criminal reports, according to a study undertaken by a National Police researcher. From France,
48 percent of jihadis were already known to the police for delinquency, as per a Coordination Unit of the
Fight Against Terrorism (UCLAT) analysis of 265 jihadis from that country believed to have died in Syria
and Iraq. Meanwhile, from the United Kingdom, at least 47 percent of converts who travelled to Syria had
previous criminal convictions, according to a previously unpublished study by a serving Metropolitan Police
Officer using official Police National Computer records. Similarly, a United Nations report highlights the
prevalence of criminality among foreign fighters from Austria,6 and officials from Norway told the authors
that “at least 60 percent” of their country’s jihadis had previously been involved in crime. In short, criminal
and extremist milieus routinely overlap.

Perhaps the most widely used typology of violent conflict for research comes from the Uppsala Conflict
Data Program (UCDP), which distinguishes between three different types of organized violence.

1) The first basic type is called an armed conflict, which is defined as “a political disagreement between
one actor (a state) and another actor (which could be a state or an organization).” In order to be
considered an armed conflict by UCDP, it must have arrived at a certain threshold in terms of people
killed during a year (minimum of 25). An armed conflict could be interstate (a conflict involving one
state against another state) or an internal conflict (a government versus a rebel movement). The
essential criteria to be considered an armed conflict is that the violence and associated deaths have to
be a product of political design or strategy.
2)
The second UCDP category is called non-state conflict, which includes communal violence, tribes
attacking each other, and gang-related violence all reaching the threshold of at least 25 killed. This is
treated as a different category of violent conflict because it is often unclear what motivates this
violence, or how political it is. This violence is not directed against the state but is often considered
to be inter-communal in character.

3) The third category is called one-sided violence. This is when populations are subjected to violence
that is not particularly well organized. This would cover, for example, genocide and acts of terrorism.
This violence can be perpetrated by a state or by a non-state actor, yet at its core it is ideologically
motivated and driven to further political goals.
When it comes to the crime-conflict “nexus”, however, these categories pose two fundamental challenges
for researchers and policy makers. The first is that it is increasingly difficult to determine who the
conflicting parties are. In fact, there seems to be a proliferation of sub-state players that are engaged in
armed conflict today representing a variety of motivations.

According to the Armed Conflict Location & Event Data Project (ACLED), there have been significant
changes in the main perpetrators of organized, armed political violence. As the graph below illustrates, by
ACLED’s account political militias are considered to be the main perpetrators of violence in Africa. Yet, it
is inherently difficult to assess who these political militias are and what they represent

This brings us to the second major challenge - the difficulty of determining conflict actor motives. As was
mentioned earlier, conflict today has witnessed a mingling of political actors with criminal elements. This
poses the question of whether instances of violent conflict in which criminal motives are mixed with
political ones can still be considered an armed conflict. For UCDP, the key factor is whether criminal groups
aspire to take control over the government or a particular territory. If they have such motives, the violence
would be considered an armed conflict. Yet, by the same token if these actors are not fighting for political
power, but for criminal gain, this would not be considered an armed conflict.

Defining organised crime has been even more profound, given that it encompasses such a wide range of
illegal acts, including everything from trafficking to cybercrime. The compromise reached within the
framework of the UN Convention on Transnational Organised Crime (UNTOC) was to define an organised
criminal group, rather than the act itself: “as a structured group of three or more persons, existing for a
period of time and acting in concert with the aim of committing one or more serious crimes or offences
established in accordance with this Convention, in order to obtain, directly or indirectly, a financial or other
material benefit.”

Yet, reality is not so clear cut. Just as there is a high degree of diversity among conflict actors, criminal
organizations and terrorists can range from highly structured organizations to more fluid and dynamic
networks. Furthermore, criminal organization can engage in terrorism and a terrorist organization can
engage in organized crime. As Walter Laqueur acknowledged back in 1999, the seemingly irreconcilable
differences that once existed between organized crime groups and terrorists have grown less distinct. Some
organized crime groups possess an active hostility towards the state and a number of terrorist groups have
taken over activities that were once the domain of organized crime. In fact, both organized crime and
terrorism today can be viewed as a “strategy”. This puts into question approaches that treat organized crime
or terrorism as labels that a priori apply to certain non-state groups engaged in illicit activities.

Definitions of Terrorism:

In common parlance, however, terrorism is defined via the use of violent acts that are intended to intimidate
or coerce a civilian population in order to influence the policy or conduct of a government by intimidation or
coercion. The challenge has been to distinguish acts of terrorism from the legitimate struggles of people in
situations of insurgency or asymmetrical warfare. The US Government defines violent extremists as,
“individuals who support or commit ideologically-motivated violence to further political goals.” When it
comes to the notion of terrorism, the European Union combines two elements: an objective element, which
refers to a series of serious criminal acts (murder, bodily injuries, hostage taking, extortion, fabrication of
weapons, committing attacks, and threatening to commit any of the above), and a subjective element, as
these acts are deemed to further political goals by seriously intimidating a population, unduly compelling a
government or international organization to perform or abstain from performing any act, or seriously
destabilizing or destroying the fundamental political, constitutional, economic or social structures of a
country or an international organization.

Terrorism is defined as “the unlawful use of—or threatened use of—force or violence against individuals or
property to coerce or intimidate governments or societies, often to achieve political, religious, or ideological
objectives.” –  This includes terrorist organizations, home-grown extremists, and like-minded (politically,
ideologically driven) insurgents or guerrillas.

Following the distinctions as laid out above places the emphasis on not only a study of the group and its
modus operandi and organisational structure, but more importantly the need to situate this in local context
and to understand the political economy. In reality, the dynamics of individual groups are driven by the local
environment, available resource flows, the policies of the state in response, as well as changes in the broader
prevailing regional and international situation. Each group (both terrorist and criminal) is unique and
therefore, so are the relationships between them.

Conceptions of organised crime are reflected in the UN Convention against Transnational Organized Crime
(the Palermo Convention), adopted under UN General Assembly Resolution A/RES/55/25 on 15 November
2000 and entering into effect in 2003. As of May 2016, the Convention has 147 State Signatories and 186
State Parties. Article 2 of the international treaty offers the following definitions of “organized criminal
group” and “serious crime” (UNODC, 2004- 5):

a) “Organized criminal group” shall mean a structured group of three or more persons, existing for a
period of time and acting in concert with the aim of committing one or more serious crimes or offences
established in accordance with this Convention, in order to obtain, directly or indirectly, a financial or
other material benefit;
b) “Serious crime” shall mean conduct constituting an offence punishable by a maximum deprivation of
liberty of at least four years or a more serious penalty.

While the UN Convention represents a minimum consensus among the international community on what
organised crime is, in recent times the “illegal-enterprise model” (Kleemans, 2012: 616) of organised crime
that underpins it has increasingly become the object of critique. According to Edward Kleemans, for
instance, there is not enough evidence to view members of criminal groups foremost as “rational, profit-
oriented entrepreneurs, who are involved in activities that, although illegal, are driven by the same laws of
supply and demand as legal activities” (ibid.: 616).

In this author’s view, “there is nothing wrong with the assumption that economic motives may explain
criminal activities” but “there is something wrong […] with the assumption that the actions of people
involved in organised crime are coordinated by an invisible hand [of the market]. In essence, organised
crime is about criminal co-operation under difficult circumstances. Under such circumstances, the visible
hand of social relations, and the visible hand of manipulation and violence is much more important” (ibid.:
626). Because illicit markets are characterised by the “handicap of illegality”, which is reflected in a low
trust environment, social relations become crucial for the “execution of transnational, illegal activities”
(ibid.).

Transnational organized crime refers to those self-perpetuating associations of individuals who operate
transnationally for the purpose of obtaining power, influence, monetary and/or commercial gains, wholly or
in part by illegal means, while protecting their activities through a pattern of corruption and/ or violence, or
while protecting their illegal activities through a transnational organizational structure and the exploitation
of transnational commerce or communication mechanisms. There is no single structure under which
transnational organized criminals operate; they vary from hierarchies to clans, networks, and cells, and may
evolve to other structures. The crimes they commit also vary. Transnational organized criminals act
conspiratorially in their criminal activities and possess certain characteristics which may include, but are not
limited to:

 In at least part of their activities they commit violence or other acts which are likely to intimidate, or
make actual or implicit threats to do so;
 They exploit differences between countries to further their objectives, enriching their organization,
expanding its power, and/or avoiding detection/apprehension;
 They attempt to gain influence in government, politics, and commerce through corrupt as well as
legitimate means;
 They have economic gain as their primary goal, not only from patently illegal activities but also from
investment in legitimate businesses; and
 They attempt to insulate both their leadership and membership from detection, sanction, and/ or
prosecution through their organizational structure.
Kleemans’ emphasis on the salience of social relations in the organisation and conduct of criminal
activities ties in with other more recent contributions to the study of organised crime. John de Boer and
Louise Bosetti, for instance, highlight the importance of research on “criminal opportunities”, where the
aim is, " […] to focus on understanding and tackling markets, products, services and identities that can
be criminally exploited for multiple, not just economic, purpose and effect. This approach enables us to
focus on how new criminal opportunities enabled by modern technology, political upheaval, conflict and
natural disasters provide motivation for individuals, and groups, who formerly were not connected with
criminal activity to engage in it (de Boer & Bosetti, 2015: 3)".
Further, they point to, the emergence of literature that approaches organized crime as a type of “strategy”
that is adopted by criminal organizations and warring parties (whether state-based or non-state).
Depending on the context and situation […] armed groups will either adapt criminal or political strategies,
sometimes interchangeably, and sometimes with different factions within the same group pursuing
distinct strategies. […] Non-state violent actors […] employ a variety of strategies that combine different
motives, methods and targets. In the process, these actors often develop political capital among local
populations and in some case overtly challenge the state (de Boer & Bosetti, 2015: 3).

The relationship between organised crime and the state—that is, whether it is one of confrontation or
cooperation—is indeed a crucial issue, not least for understanding and mitigating the negative impact on
development and governance. In this regard, Ivan Briscoe and Pamela Kalkman emphasise that: " An
approach rooted in the notion of institutional capture by an external criminal force is – despite its
persuasive rhetoric – gravely mistaken. [...] Illicit activity has become part of the living organism of
many countries’ public and business affairs. It must be treated not as a foreign body, but as an integral
part of governance and economic systems, and it is essential that policy responses are adapted to this
reality (Briscoe & Kalkman, 2016: 3)."

This “embeddedness” of organised criminal activities and actors in the very fabric of the economy, the
state and society has alternatively been captured by concepts such as “criminal governance” (Arias,
2006), “co-opted state reconfiguration” (Garay-Salamanca & SalcedoAlbarán, 2012) and “crimilegality”
(Schultze-Kraft, 2016), as well as by foregrounding the social bases and origins of organised crime
(Duncan, 2014) and the emergence of “protection markets” (Ellis & Shaw, 2015).

While not a unified body of research, these perspectives have in common that they foreground issues of
criminal-illegal governance, particularly in fragile states. They challenge notions of the existence of a
boundary between organised criminal groups and networks, political institutions and society and the idea
that the actions of criminal organisations are essentially a function of their pursuit of financial and other
material gains by illegal-criminal means. What they propose instead is to focus attention on the economic,
political and social relationships, bargains and agreements between a range of different state and (armed)
non-state actors, including criminal groups and networks, which are often localised but may also extend
from the local up to the national and international levels.
African organised crime experts Stephen Ellis and Mark Shaw, referring to an erosion of the “frontiers
between politics, crime and business” (2015: 511), highlight that, in Africa, " […] the protection economy
may be considered as a set of transactions entered into for the purpose of ensuring the facilitation,
sustainability and safety of […] activities undertaken by a criminal enterprise. In almost all cases, some
elements of the state are involved, and indeed in African countries, the state (no matter how weak) is
often the defining element in protection markets, either as a direct participant, facilitator, or regulator
(Ellis & Shaw, 2015: 522–3)"
This analysis is echoed by Latin Americanist Desmond Arias’ on drug trafficking in Rio de Janeiro,
which shows that “drug traffickers are well connected to state and social actors and […] their political
projects go beyond clientelism, linking them into legitimate, rule abiding state bureaucrats, NGOs [non-
governmental organisations], and religious organisations. They help traffickers make use of money made
by legitimate businesses and build and reinforce their legitimacy in favelas” (Arias, 2006: 322). Thus,
“more than parallel ‘states’ and ‘polities’ drug trafficking in Rio represents an expression of transformed
state and social power at the local level” (ibid.)."
Recent work by Schultze-Kraft approaches the issue of the relationship between the criminal and non-
criminal spheres of economic, political and social orders in the global South by introducing the concept of
“crimilegality”: "A crimilegal order is neither “modern” nor “non-modern” but combines and
integrates elements of both. […] “Legal” institutions and organizations coexist and interact with
“illegal” and “criminal” ones. Formal constitutional and legal dispensations coexist and interact with
patrimonialism and clientelism. Regular patterns of social exchange, interaction and transaction that
take place in the grey areas that lie between legality and illegality-criminality create their own “law”.
Crimilegality creates crimilegitimacy (Schultze-Kraft, 2016: 37)."

Defining the “Crime-Terror Nexus”

Security Council Resolution 2195 identified a nexus in which criminal networks and terrorist groups meet,
and their objectives, identities and modus operandi overlap. In many theatres, these lines are becoming
blurred, particularly in the cases of protracted sectarian or separatist conflicts, and the definitions used by
many policy makers to gauge responses are being challenged. Terrorists are benefiting from transnational
organized crime in some regions, including from the trafficking of arms, persons, drugs, and artefacts and
from the illicit trade in natural resources including gold and other precious metals and stones, minerals,
wildlife, charcoal and oil, as well as from kidnapping for ransom and other crimes including extortion, and
bank robbery. Furthermore, terrorist groups benefiting from transnational organized crime may contribute to
undermining affected States, specifically their security, stability, governance, social and economic
development.

These groups often adopt similar methods, but they may or may not share motivation. Crime is economically
driven, while terrorism is fuelled by ideological and political beliefs. Over the past 25 years, terrorist and
criminal organizations have developed successful working relationships, leveraging the expertise/skills of
the other group.

 Terrorist groups and transnational criminal networks share many of the same characteristics,
methods, and tactics.
 There has been an intersection of terrorist groups and criminal networks, which has led to an
increased threat of this cooperation and convergence.
 This intersection can be grouped into three categories:
1. Coexistence: the groups operate in the same geographic region at the same time
2. Cooperation: the groups find their mutual interests are both served by temporarily working
together
3. Convergence: the groups are likely to engage in behaviours that are more commonly
associated with the other
 Examining organizations’ structures and nature of operations, researchers find that organized crime
and terrorism are "bleeding" into one another.

The notion of a nexus between criminal and terrorist organizations surfaced during the 1990s. The term
narco-terrorism, however, was coined even earlier than this. Ironically, it initially referred to the Medellin
drug trafficking organization in Colombia using terrorist tactics to coerce the government into abandoning
its policy of extraditing drug traffickers to the United States; subsequently, its meaning was reversed and it
was predominantly used to describe terrorist organizations using narcotics trafficking as a funding
mechanism. After September 11, in particular, it was frequently used to refer to the FARC and the Taliban
using income from the drug business to fund their insurgent activities. Meanwhile, the broader notion of a
criminal terrorist nexus that emerged during the 1990s, inspired by events in the Balkans, focused less on the
appropriation of criminal activities by terrorists or terrorist activities by criminals, and more on direct
cooperation between criminal and terrorist organizations—a cooperation that soon became enshrined in the
concept of a criminal terrorist nexus. The Madrid bombings in 2003, in which the attacks and their
preparation were financed with the proceeds of drug trafficking, are also portrayed as an example of a nexus
in action.
The “crime-terror nexus” is a relatively new phenomenon. There have been no efforts to track
systematically the interactions between these different types of groups, making it difficult to identify trends.
A similar dilemma concerned the illicit trafficking of Chemical, Biological, Radiological, and Nuclear
materials (CBRN), though in 1995,the International Atomic Energy Agency (IAEA) successfully launched
the Incident and Trafficking Database (ITDB),which tracks the smuggling of radioactive and nuclear
materials. A database recording the complex crime-terror interactions would facilitate mapping of trends,
and would subsequently contribute to more effective counter-terror measures. Currently, anecdotal histories
and inter-disciplinary research from terrorism, criminology, sociology, and other fields, enables scholars to
distinguish key trends in the relationship between organised crime and terrorism, as well as the significant
gaps in corresponding threat assessments. The discussion in the academic and policy communities over the
very existence of a nexus between TOC and terrorism has been playing out for over a decade. Whether
referred to as a “nexus,” or framed in terms of related issues of convergence, transformation and hybridity,
one thing remains clear— there is no consensus, and a tendency for scholars to talk past one another, even
when in agreement about some of the most important factors being analyzed.

While links have been drawn between terrorist and organised criminal groups, the nature, extent and depth
of such links have been debated. The interaction between terrorist and organised criminal groups is not
straightforward, each case is context specific and constantly evolving, and thus to make any general
statements about how they reinforce each other is a challenge. Following an overview of the evolution of the
nexus debate, the subsequent sections provide case studies of the interplay between terrorism and organised
crime in Europe’s peripheral regions (Africa, the ‘AfPak’ intersection of Western Asia, and the Middle East
and North Africa) and the challenges of mapping these relationships therein. In particular, this paper
analyses the nexus between TOC and terrorism in Europe and its peripheral regions, and the subsequent
implications for EU policy.

Thus, rather than trying to depose a government in a major stroke (golpe or coup) or a prolonged
revolutionary war, gangs and other TCOs more subtly take control of turf one street or neighbourhood at a
time (coup d’ street), or one individual, business, or government office at a time. At the same time, instead
of directly confronting a national government, sophisticated and internationalized gangs and their TCO allies
use a mix of complicity, indifference, corruption, and violent intimidation to quietly and indirectly co-opt
and seize control of a state, a portion of a state, or controlling institutions of a state.

This indirect and primarily political-psychological approach in contemporary unconventional conflict is not
well understood. To help leaders and opinion makers come to grips analytically with the most salient
strategic aspects that dominate contemporary asymmetric gang and TCO-related violence, we, first, clarify
the conflict context within which the worldwide gang phenomenon and other TCOs operate. With this as
background, we can begin to answer the fundamental “What, Who, and Why?” questions, and set out to
understand the adversary, and the type of conflict and threat we face. Second, we briefly examine selected
cases from Central America, the Caribbean, and South America that demonstrate how differing types of
criminal activities contribute to the instabilities that lead to the erosion of nation-state sovereignty and the
processes of state failure. With these cases as background, we can more fully answer the necessary “Who,
What, and Why questions, and begin to deal with the “How?” question. Then, as part of this section of the
paper, we can advance our understanding of the political psychological and military-police factors that lead
to strategic success or failure in contemporary unconventional war—that is, the outcome. The explanation of
outcome will answer the “So what?” question.

The majority of scholarship decidedly places the emergence of the crime-terror nexus after the collapse of
the Soviet Union and the dawn of the Information Age. Lack of state funding compelled terrorists to pursue
other means of financing whilst information technology and globalisation facilitated communication and
coordination between actors. The discussion of the crime-terror nexus has become more complex, scholars
having defined three main nexus conditions: cooperation, transformation, and convergence. Pioneer crime-
terror nexus researcher, Makarenko developed a “crime-terror continuum” that depicts these main areas. At
the furthest ends of the continuum lies cooperation, in which criminals and terrorists engage in alliances
ranging from less formal, transaction-based agreements (i.e. guns for drugs) to sophisticated coalitions (i.e.
coordinating transnational smuggling routes).Then, Makarenko compares the operational and organisational
similarities to identify convergence, or the process by which groups become hybrid organisations that retain
both criminal and terrorist qualities. Rather than subjugating one’s organisation to the risks involved by
collaborating with disparate groups, organisations instead “mutate their own structure and organisation to
take on a non-traditional, financial, or political role”. Dishman notes that the adoption of in-house
capabilities is already one mode of transformation, whereas Makarenko defines true transformation when a
group’s end aims have evolved completely to the other end of the crime-terror continuum.

Despite acknowledgement that motivations can shift, much of the crime-terror nexus analysis stands by the
distinction that criminal groups are primarily profit driven, while terrorist groups retain ideological aims.
Furthermore, if motivations do shift, the applicable labels of such groups also change. There is no way then
to conceptualise an ideologically-driven terrorist group with purely criminal intentions. The hypothesis that
terrorist groups sometimes use ideology as a disguise to mask their criminal intentions is the closest
academia has come to reconciling this conceptual gap. Nevertheless, policy reports lag in progress; it
appears exceptionally difficult for the policymaking community to view terrorist groups first and foremost
as criminal organisations. Additionally, many have compared the extent of the crime-terror nexus according
to diverse geographic idiosyncrasies. Makarenko and Ibanez highlight post-conflict and transitional zones
with poor border regulation, weak authority, and high rates of corruption as the most vulnerable to situations
of symbiotic, long-term collaboration between criminal and terrorist groups. In these regions, such as
Somalia, Northern and Western Africa, Afghanistan, Pakistan, and the Balkans, it is increasingly difficult to
distinguish between these entities. More studies continue to focus on these geographic “hotspots” and the
interplay between crime and war. Incidentally, Makarenko comments that civil war dynamics are also
changing as criminal and terrorist groups “hijack” the political and economic momentum of these conflict
regions.

There are many similarities and points of interaction between terrorist groups and criminal organizations.
Both groups tend to:

 Operate as rational actors.

 Use extreme violence.
 Use kidnappings, assassinations, and extortion.
 Operate secretly.
 Defy the state and the rule of law (except when there is state sponsorship).
 Use fatal measures when a member leaves.
 Present an asymmetrical threat to the nation-states they oppose and attempt to undermine.
 Have “interchangeable” recruitment pools.
 Be highly adaptable, innovative, and resilient.
 Have back-up leaders and foot soldiers.
  Have provided social services, though this is much more frequently seen with terrorist groups.

Research suggests there are four identifiable factors which have had a notable impact on the success of
terrorist groups and organized criminal networks:

2. Border porosity
3. Population transfers (e.g., freedom of movement, migration)
4. Financial and commercial developments (e.g., globalization)
5. Communications technology.

There are also many drivers and enablers of transnational cooperation between terrorist groups and
organized criminal networks including:

 Corruption
 A lack of democratic participation in a country
 Chronic state failures
 Crises in political systems
 Deteriorating socioeconomic conditions
 Civil and regional conflicts
 Increased media attention.

Political implications of transnational terrorism and crime convergence

 Political instability is a driver resulting in the increased convergence/cooperation of terrorist and

criminal organizations.–  Illicit transnational networks pose a threat to political stability, capitalizing
on it where it already exists.
 Democratic participation, or lack thereof, plays a significant role in the success of terrorist and
criminal groups and their potential for convergence.–  The absence of a democratic process, which
encompasses a system in which citizens feel a lack of trust in their ability to legitimately and fairly
select leadership, increases the likelihood of a group’s ability to influence a region.
 Increase in disenfranchised members of society increases the recruitment pool for both organized
crime and terrorist groups and increases the potential for influence and coordination.– 
Unemployment/underemployment, resource scarcity, demographic shifts, and migration all could
increase the desire for the two types of groups to work together.

Technological implications of transnational terrorism and crime convergence.

 Technological advancements and globalization have allowed for simple, somewhat informal
cooperation.– These advancements allow for terrorist and organized crime groups to communicate
without detection (using encrypted messaging), sharing methods and increasing potential
convergence.
 Terrorist groups use social media to share its mission and grow its base, regionally and
internationally. Their online presence increases the chances that a criminal organization might find
common ground and begin cooperating on methods and targets.
 Increased cyber capabilities provide new revenue sources, and terrorist organizations might look to
cooperate and align with organized crime groups already using cybercrime.

Legal implications of transnational terrorism and crime convergence.

 Combatting terrorism and organized crime today presents many legal challenges domestically and
internationally. –  As these organizations increasingly cooperate and converge, it becomes more
difficult to determine which legal means to prosecute (e.g., which jurisdiction is responsible when
transnational activities, require cooperation between law enforcement and intelligence agencies).
  Typical criminal law enforcement is not sufficient when dealing with transnational terrorism. If
organized crime groups converge and cooperate with terrorist organizations, it could become more
challenging for traditional law enforcement to prevent their actions and enforce the law.
 There is the potential within failed/failing states for a organized crime/terrorist network to operate
free from legal prosecution, especially if they control resources and are working alongside a corrupt
government.

Past trends

Tamara Makarenko has written extensively about the relationship between criminal groups and terrorist
organisations as well as the types of activities each of these actors engage in to accomplish their objectives.
Her “model of terrorist-criminal relationships” suggests that the relationship between TOC and terrorism
should not be conceived of in terms of path analysis, but rather as a sliding scale on which groups can go
back and forth between the extremes of crime and ideological insurgency, occupying any number of
intermediate stages between these poles along the way. Besides relationships between criminals and
terrorists and the activities in which they engage, the structure of these organisations and their logistical
requirements also warrant further scrutiny. Hutchinson and O’Malley downplay the notion of a nexus,
although they do concede that under certain conditions, terrorists and criminals will cooperate for mutual
benefit. Indeed, this cooperation is facilitated by the changing structural organisations of these groups,
which have increasingly shifted to a more decentralised network, rather than a top-down vertical hierarchy.
From a logistical standpoint, some scholars argue that over time, terrorists and criminals will greatly
increase their ability to in-source the activities they used to outsource through cooperative relationships, or
what Phil Williams has called “do-it-yourself (DIY) organised crime. This includes developing an
appreciation for the value of corruption and bribery, another facilitating factor in the convergence between
TOC and terrorism.

In the past, numerous terrorist organisations in Europe have engaged in varying degrees of criminal
activities to fund their organisations, including Irish Republican Army offshoots and dissident groups and
the Kosovo Liberation Army (KLA) providing examples of terrorist-criminal hybrids. There have also been
linkages between terrorist groups and ethnically based criminal gangs operating in Europe and on its
periphery, including ethnically based-criminal gangs of Kurdish descent, or criminal-terrorist hybrids
comprised of Chechens and Albanians, respectively. For the most part however, the concept of the nexus in
Europe has assumed an operational context, with terrorist groups adopting the use of criminal methods to
fund their operations and organisations.

The present situation, discussed more fully below, is somewhat reversed— perhaps best illustrated by the
phenomenon of foreign fighters leaving Europe to travel to Iraq and Syria to fight alongside the Islamic
State and other terrorist groups. Here, individuals with predominantly criminal pasts have assumed the
ideology of Salafi-jihadism. This is far different than previous criminal use of terrorist tactics in Europe,
wherein the Italian mafia and criminal outfits from the Balkans would occasionally conduct bombings or
assassinations to strike out against the state, largely for the obstruction of their criminal activities.

Present trends

Indeed, where the concept of a nexus between organised crime and terrorism might be most interesting is the
emerging profile of small-time crook to terrorist, a profile that is now emerging in many of the jihadist
attacks and plots recently targeting Europe. With the continued politicisation and radicalisation of criminals,
instances of transformation at the individual level (not from an organisational level), from criminal or drug
trafficker to terrorist and from criminal enterprise to terrorist organisation could become more frequent.
Abdelhamid Abaaoud, the leader of the Paris November 2015 attacks, Ahmed Coulibaly, a key figure in the
Charlie Hebdo attacks, and numerous other terrorists were involved in various forms of criminality before
becoming jihadists. Mohamed Lahouaiej Bouhlel, the terrorist who killed 84 people by driving a truck
through a crowd on Bastille Day in Nice, France, also had a history of petty crime.15 Anis Amri, the
Tunisian national responsible for the 2016 Berlin Christmas market attack, spent four years in an Italian
prison.
A study by Emilie Oftedal of the Norwegian Defence Research Establishment (FFI) looked at data on the
financing of 40 jihadi cells that have plotted attacks against European targets between 1994 and 2013 and
concluded that the second most common method of funding for these attacks (in 28% of cases analysed) was
illicit trade (which included drugs, cars, forged documents and weapons). Three-quarters of the plots cost
less than $10,000 to plan.18 The 2004 Madrid train bombings killed 191 people and injured another 1,600 in
an attack financed primarily by the leader of a small, yet effective drug trafficking network that smuggled
hash from Morocco and ecstasy from Holland to Spain. It is easy to see why some terrorists planning similar
types of attacks would follow the Madrid model—small sums of money collected over time through the use
of somewhat banal criminal activities like drug dealing, various types of fraud and petty theft. Besides the
2004 Madrid cell, proceeds from drug trafficking are also suspected of funding another plot against Madrid
aimed at the National Court (2004), the Hofstad Group in Holland (2004), a Swedish cell (2010),
Mohammed Merah’s rampage (2012) and an attack at a kosher supermarket in Paris (2012).

Edwin Bakker’s research on jihadi terrorists in Europe found that about a quarter of terrorists sampled in the
study had a criminal record while many had been involved in various forms of crime without having been in
prison or sentenced in a different way. A more recent study, focused strictly on ISIS, found that of 58
individuals linked to 32 ISIS-related plots in the West between July 2014 and August 2015, 22 percent had a
past criminal record or were in contact with law enforcement. A recent analysis by Sam Mullins noted that,
of 47 cases of jihadist inspired violence carried out in Western countries between January 1, 2012 and June
12, 2016, half of the attackers had a criminal past.

While there is no current evidence indicating in-depth involvement in the smuggling or sale of narcotics, it is
important to note that many ISIS recruits, particularly those from Europe, have relied on drug trafficking as
a means of generating revenue at a low level in what Magnus Ranstorp has called “micro-financing the
Caliphate.” In many ways now in Europe, criminals and terrorists recruit from the same milieu. It is not
necessarily that the sale of drugs goes directly into ISIS coffers, but proceeds garnered from peddling
narcotics affords jihadists in Europe the financial flexibility to travel back and forth to Syria as well as to
save the money to help procure the resources necessary for planning a terrorist attack (e.g. weapons,
vehicles, cell phones). In addition to drug trafficking, European criminals who have travelled abroad to join
ISIS have also financed their activities through various types of fraud (mortgage, credit card, value added
tax), petty theft, and low-level criminality.

Future trends

Where previously the nexus could be characterised as largely operational, with terrorists appropriating
criminal methods to fund their organisations, and the nexus of the present is small-time criminals who have
“found religion,” either in prison or via a charismatic imam, what will the future hold for Europe?

It is unlikely that the future will be like the past, as Europe currently has only five groups remaining on the
U.S. Department of State’s list of designated foreign terrorist organisations (FTOs) and most of these are
largely dormant.30 It is thus more likely that in the short-to-medium term, the future of the nexus will look a
lot like the present, especially with the return of foreign fighters from Iraq and Syria to their countries of
origin in Europe. The next five years will be shaped by what FBI Director James Comey has dubbed a
“terrorist diaspora,” which he believes will occur when scores of foreign fighters leave the Middle East and
attempt to return to the West. ISIS may have deployed hundreds of operatives into the European Union
already according to some reports, ensuring an effective “international terrorist strike capability” for the
better part of the next decade. The post-ISIS diaspora is likely to have more connections to the European
underworld than ever and be networked though the group’s continued reliance on spreading its propaganda
through social media.

On the other hand, the longer-term could be something totally different—a black swan that the EU is
unprepared for and is unable to currently conceptualise due to the unpredictable variation across several
critical factors, including climate change, migration, and technological development. The future of the nexus
will be complicated by technological advancements, including but not limited to, encryption, virtual
currencies, the evolution of 3-D printing and the dark web.
In addition to the threat of returning foreign fighters, the current wave of migration has the potential to be far
more relevant to future configurations of a TOC-terrorism nexus. The response to the movement of people
from Africa and the Middle East to Europe has been the emergence of a vast, sprawling network of
transnational criminal networks used to smuggle and traffic migrants that involve different kinds of groups
and individuals and, according to director of Europol Rob Wainwright, could number as many as 30,000
people. While smugglers have yet to have been seen to crossover or integrate crime and terrorist groups in
any substantial way, there is the possibility that networks and associations built and strengthened through
people smuggling may turn to other illicit commodities or criminal acts.

More pertinent, however, is that unless new migrants are better integrated than their predecessors, they could
become the recruiting pool for tomorrow’s transnational criminal and extremist organisations. Although
migrants are usually eager to start anew in their adopted countries, a small proportion may be members of
criminal organisations, or have a history of low level criminality, and bring with them criminal skills and
knowledge as well as criminal affiliations and contacts. Some migrants, particularly those who fail to gain
asylum and remain illegally, will not be adequately assimilated into their host countries, despite renewed
attention to public policies designed specifically to address this immense challenge. For criminals looking to
expand their bases of operations, recently arrived migrants who are not well integrated into society or the
licit economy and who exist on the fringes of the black market, are the ideal type of recruits. Furthermore,
while Diaspora communities are typically a force for positive development, resilience and support for their
home countries, an expansive Diaspora network can also provide cover and logistical functions that facilitate
illicit activities.

Criminal organizations and terrorist groups are, in some cases, forging closer links with one another. Both
terrorist and criminal organizations operate in the same underworld, and often in the same geographic area
or weak state; they have similar needs in terms of false documentation, weapons, and money; and each type
of organization could find advantage in forging closer links with the other. Al Qaeda in the Islamic Maghreb
(AQIM), which has been providing "protection” for Latin American cocaine shipments that pass through
West Africa and are then moved through the Sahel before being smuggled into Europe. This is often
portrayed as a perfect example of the new forms of cooperation between criminal and drug trafficking
organizations on one side and terrorist organizations on the other. We can identify an emerging reality in
which entities are adapting and evolving, in which relationships are coming and going, and in which new
kinds of organizations and arrangements are emerging. In doing this, it is important to recognize that
existing categorizations might not be adequate to encompass the variety of complex, highly dynamic
relationships and interactions between criminals and terrorists. Consequently, it might be necessary to
develop new categories and concepts. As Karl Weick and Kathleen Sutcliffe note, “people who persistently
rework their categories and refine them, differentiate them, update them, and replace them notice more
and catch unexpected events earlier in their development. That is the essence of mindfulness.”

Indeed, in thinking “mindfully” about organized crime and terrorism, at least four different phenomena or
dimensions of the issue are discernible Relationships between groups involved in political violence and
those involved in criminal business' Appropriation of methods, i.e. the possibility of each kind of entity
engaging in the kinds of activity associated with the other (terrorists using crime for funding and criminals
using terrorism for some political objective);x The emergence of hybrid organizations that harmoniously
combine political and financial objectives; A transformation in identity and purpose, whereby a criminal
organization becomes radicalized and engages in political violence or a terrorist organization abandons its
campaign of violence in favour of a criminal agenda and the pursuit of profit rather than political,
ideological or religious goals.

It is necessary to consider the spectrum of possible relationships between criminal and drug trafficking
networks on the one side and terrorist organizations on the other. Such an approach reveals examples of
conflict as well as cases of cooperation. Instances of this include the relationship between the PKK and
Kurdish drug networks in Europe. This started as a predatory relationship as PKK imposed transit taxes on
traffickers crossing territory it controlled; when the PKK saw the financial benefits of drug trafficking and
moved into the business for itself, the relationship became hostile and violent. Another example is the
conflict over the profits from tribal rackets between the Sunni tribes and AQI, a conflict that provided the
basis for the “Sunni Awakening” and U.S. success in Anbar.
There are also examples of cooperation. On occasion, terrorist organizations need goods or services that can
only be provided by others. In such cases they might reach out to conventional criminal organizations. One
possibility, for example, is that they seek assistance from criminal organizations that can provide operational
support. Such groups, which are sometimes characterized as “criminal service providers” include those
specializing in clandestine travel and possessing the resources and expertise to facilitate the illegal
movement of people. Similarly, when they need weapons or explosives, and have difficulties in procuring
them directly, they turn to criminal brokers who are adept at putting together customers and the illegal
supplies they need. The brokers might or might not know that they are dealing with terrorists. For the most
part, however, the main concern of the brokers is that the payments from the customers will be prompt. In a
similar vein, those terrorists lacking the skill or resources to make fake passports will call on providers who
specialize in document forgery. Such relationships generally involve little more than a one-time business
deal, although sometimes it will be more enduring.

Cooperation is likely to occur and be more enduring and extensive when criminal and terrorist organizations
share the same geographical and opportunity space, as they did in Iraq, Afghanistan, and the Sahel. Much
of the cooperation occurred in the kidnapping business, and ranged from tacit to explicit. Sometimes the
initiative was taken by kidnapping gangs, which abducted people with the expectation that they could sell
them to political groups that might either kill or ransom them. So long as the gangs were paid, the fate of
the hostages was irrelevant. On other occasions, however, the insurgency and jihadi groups let it be known
that they had certain requirements or targets; the for profit kidnapping groups typically responded to what
was, in effect, a request for services by abducting appropriate victims. In other words, the criminal market
worked very efficiently and successfully, corresponding fully with John Robb’s notion of a “bazaar of
violence.”

At other times, cooperation can be driven by sympathy or affinity. In Italy, for example, it was reported that
“a member of the Camorra, the Neapolitan Mafia, converted to Islam and subsequently set up an exchange
of arms for drugs between the Camorra and Islamic terrorists.” According to Pierluigi Vigna, Italyȇs
national anti mafia prosecutor, these cooperative links were formed in prison. The notion of affinity between
a criminal and a terrorist organization facilitating cooperation is also relevant in terms of Lebanese criminal
and drug trafficking organizations and Hezbollah. In this connection, however, there might be an important
distinction between the Chekry Harb trafficking organization and that of Ayman Joumaa. Both made
payments to Hezbollah that can be understood as protection or extortion payments, but Joumaa seems to
have had more affinity for the organization than did Harb.

What Enables and Sustains the Nexus?

In addition to global political pressures and realities, there are numerous other reasons and opportunities that
lead terrorist groups to embrace organized criminal activity as a source of revenue, or to seek alliances with
organized crime groups. The expanding forces of globalization are enabling transformation and convergence
through rapid communication, travel, surveillance, and information access. The growth of weak or failing
states, exacerbates this tendency. The absence of the rule of law in places such as Somalia, Kosovo, and
Afghanistan provides ideal conditions for the blending of criminal and terrorist activities. Economic
hardship in many of these nations leads to corruption and trafficking of illicit goods, and there is little
incentive to fight organized crime. Terrorist groups who otherwise might rely on charitable contributions or
even “legitimate” businesses have little or no access to either in a failed state, leaving trafficking and other
forms of crime as the obvious and easier alternatives. An organic criminal capability becomes paramount
and the sole method by which to sustain the organization.

The nexus between terrorism and organized crime is further enabled through the widespread availability of
small and light arms that can be both trafficked for money or used in operations. After the Berlin Wall fell in
1989, Warsaw Pact nations found themselves flush with weapons, a great many of which found their way to
the illegal arms market. Conflicts in the former Yugoslavia, West Africa, East Timor, and Central, South,
and Southwest Asia have only invigorated this arms trade. Porous international borders and corrupt or ill-
trained law enforcement in a multitude of countries have also played a role in enabling the arms trade, to the
benefit of terrorist and organized crime groups.
Technological advancements and globalization have allowed for simple, somewhat informal cooperation:-

 These advancements allow for terrorist and organized crime groups to communicate without
detection (using encrypted messaging), sharing methods and increasing potential convergence.
 Terrorist groups use social media to share its mission and grow its base, regionally and
internationally.
 Their online presence increases the chances that a criminal organization might find common ground
and begin cooperating on methods and targets.
 Increased cyber capabilities provide new revenue sources, and terrorist organizations might look to
cooperate and align with organized crime groups already using cybercrime.

The above trends have led groups such as al Qaeda and Hezbollah to develop their own in-house criminal
capabilities. While Hezbollah has been involved with methamphetamine labs and cigarette smuggling in the
United States and Canada, al Qaeda has well-developed connections with criminal syndicates in Central
Asia that include Pakistani and Afghani opium traffickers. Colombia’s FARC, however, provides perhaps
the best operational example of the transnational organized crime and terrorism nexus. FARC’s involvement
in the narcotics trade evolved from a strategy of simple taxation to one of direct control and distribution.
Trafficking profits have enabled the FARC to obtain sophisticated weapons, communications technology,
and helped them gain control of 40 percent of Colombian territory in their conflict with Bogotá.

Maritime piracy represents an area where the mixing of militant Islamic terrorism and crime can
converge with potentially severe consequences for global military and economic security. Given heavy
concentrations of al Qaeda cells and radical Islamic sympathizers, shipping lanes and pre-existing
criminality, it comes as no surprise that Indonesia, Bangladesh, Malaysia, India and Nigeria experience most
of the world’s maritime piracy attacks. Particularly alarming is the fact that criminals and terrorists not only
steal lucrative cargoes, but also have the resources to commandeer lethal cargoes such as chemicals, gas,
arms, and specialized dual-use equipment. A potential nightmare scenario for governments would be the
hijacking and sinking of one or more ships in one of the world’s most important canals or narrow shipping
lanes, such as the Straits of Malacca, the Suez and Panama canals, or oil trade chokepoints such as Saudi
Arabia’s Ras Tanura terminal. The 500,000 ton ships that traverse these waterways carry a crew of only
thirty and have no armed guards to repel raiding parties. A scuttled super-tanker in one of these locations
could create major economic disruptions. And with ship registration and documentation replete with fraud
and corruption, finding suspect or hijacked vessels is far more difficult than simply spotting a Jolly Roger
flag. The kidnapping of Westerners for ransom by the Abu Sayyaf Group and the Moro Islamic Liberation
Front is another demonstration of how the lines between crime and terrorism have become blurred.

Combating terrorism and organized crime today presents many legal challenges domestically and
internationally :-

 As these organizations increasingly cooperate and converge, it becomes more difficult to determine
which legal means to prosecute (e.g., which jurisdiction is responsible when transnational activities,
require cooperation between law enforcement and intelligence agencies).
 Typical criminal law enforcement is not sufficient when dealing with transnational terrorism. If
organized crime groups converge and cooperate with terrorist organizations, it could become more
challenging for traditional law enforcement to prevent their actions and enforce the law.
 There is the potential within failed/failing states for a organized crime/terrorist network to operate
free from legal prosecution, especially if they control resources and are working alongside a corrupt
government.

Within the United States, terrorist groups and their supporters have found a multitude of ways to raise funds
through a range of illegal activities. For example, one Detroit area Hezbollah supporter pled guilty to
charges that he and several others illegally shipped low tax cigarettes from North Carolina for resale in high-
tax Michigan, netting tens of thousands of dollars. A similar case has unfolded in North Carolina, where the
Lebanese-born Hammoud brothers were convicted of related offenses. In this well-documented case,
Mohammed Yousef and Chawki Hammoud used the proceeds of illegal cigarette sales to purchase and ship
to Hezbollah night vision goggles, mine detection equipment, laser range finders, blasting caps, and other
sensitive, prohibited military equipment. In fact, illegal cigarette smuggling is second only to narcotics in
terms of the amount of consumer spending on illegal goods. The narcotics industry remains the most
common and lucrative source of revenue to terrorists groups, leading many to legitimize this criminal
activity by emphasizing the financial needs of the organization and the role of narcotics in undermining
Western society. As has been well documented, Hezbollah operatives and their supporters are deeply
engaged in the businesses of illegal methamphetamine production and distribution. The Drug Enforcement
Administration has made a number of arrests through its Operation Mountain Express, which uncovered
Hezbollah-operated methamphetamine labs in the rural western United States. The dramatic spike in opium
cultivation in Afghanistan over the past two years provides yet more evidence of the terrorism-narcotics
nexus.

There is a nexus between Latin American organized crime and global terrorism.

 In 2016, a U.S. Drug Enforcement Agency (DEA) sting uncovered a money laundering ring, which
linked two unlikely organizations: Lebanese militants Hezbollah and Colombian drug traffickers.
 Hezbollah associates were laundering money through Miami-based accounts. Following this
investigation, U.S. authorities charged three alleged associates of Hezbollah with laundering money
for Colombian drug cartels.
 Officials also discovered other Hezbollah associates were seeking to purchase cocaine, weapons, and
ammunition from a narcotics trafficker.

The Hezbollah-South America connection is not a recent development.

 In 2011, a Lebanese man was charged for selling cocaine to the Zetas cartel and laundering money
for the group, and then using the profits of those laundering activities to finance Hezbollah.
 In 2014, Brazilian police accused a prison gang in the country of providing protection for Lebanese
inmates in exchange for Hezbollah providing the gang access to the international arms markets.

The United Nations’ International Drug Control Programme (UNDCP) and International Narcotics Control
Board (INCB) said that after zero opium production in the last year of Taliban rule in 2001, Afghanistan met
about 76 per cent of the global demand of heroin and opium by harvesting poppy on 225,000 acres that
yielded a record produce of 3,500 metric tons of opium. In 2003, the harvest is expected to yield 5,000 tons
of opium.4 Narcotics remains the most common and most lucrative form of organized crime used by
terrorists groups such as the Kosovo Liberation Army (KLA), the Islamic Movement of Uzbekistan (IMU),
al Qaeda, and Hezbollah. In addition, terrorist groups participate in other forms of crime ranging from petty
theft to the mining and distribution of conflict diamonds in Africa.

There were three broad phases identified in the evolution of the crime-terror nexus:

i. Conflict and instability: the fragility of the state in this phase is often the period in which crime and
terror groups form or take root, and in which the use of violence and financing through illicit flows are
less likely to be controlled or suppressed.
ii. Transition: where conflict transitions into peace agreements and state consolidation exercises - unless
express efforts are made to set norms, standards and counter vested interests - patterns of violence,
illicit financing and marginalisation become the status quo.
iii. Convergence: where states and institutions are stronger, the levels of violence may have been
reduced, but the level of complicity and situations of hybrid governance are entrenched, which may
include high levels of corruption.

CONCEPTS AND THEORIES

In order to understand and assess the nature and extent of the links between organized crime and violent
conflict, it is necessary to take a closer look at the concepts in play. Their evolution over time, through
decades of research on organized crime, violent conflict and terrorism, has not only shaped our
understanding but, as will be shown in this section, has led to serious limitations in our ability to accurately
capture the dynamic nature of the crime-conflict “nexus”. As the following sections highlight, traditional
notions of what constitutes organized crime, conflict, and terrorism have become outdated. Evidence on the
ground in places such as Afghanistan, Syria, and Iraq has demonstrated how conceptions of organized crime
as exclusively profit driven and hierarchically, almost rigidly, structured, no longer apply. Similarly, the
nature of 21st century violent conflict and the actors that perpetuate this violence has evolved beyond
traditional state-based conflicts to include “non-conventional” conflicts that combine political and criminal
motives. The lines that once separated organized crime from conflict and conflict from terrorism are
increasingly blurred. To effectively counter the crime-conflict “nexus” a reframing of how we define crime,
conflict and terrorism is in order. The following section will describe the limitations of some dominant
approaches and highlight promising avenues uncovered by recent research that could help depict the “nexus”
in a more robust fashion.

The “nexus” between organized crime and violent conflict has been a subject of growing international
concern. In 2004, the report of the
High-Level Panel on Threats,
Challenges and Change highlighted
the role of organized crime in
fuelling civil wars through illicit
trade in conflict commodities, small
arms and the security implications
of drug trafficking on state authority
and the rule of law. Since then, the
significant rise in the number of
United Nations Security Council
statements, resolutions and debates
that contain references to organized
crime attests to a mounting
preoccupation within the UN and
among Member States with regard
to the impact of organized crime on
peace and security (see Figure 1).

Admittedly, divergence remains among countries as to whether – or in which circumstances – the threat
posed by organized crime is a threat to international peace and security, as opposed to something else. Yet,
on the ground a growing number of peace operations now have mandates that refer to transnational
organized crime or activities that constitute transnational organized crime. The remit of these mandates is
broad and include the authority to deter drugs or arms trafficking, curb illicit flows that fund warring parties
or terrorist groups, or reinforce the capacity of national authorities (police and justice) to investigate and
prosecute criminal actors. With recent trends in violent conflict pointing to increasing connections between
organized crime, conflict actors and terrorists, attention to the “nexus” is unlikely to abate in the near future.

On the research front, we also see growing attention to the crime-conflict “nexus”. Researchers specialized
in the study of civil wars, development and peace building have increasingly integrated organized crime into
their analysis. This literature has shed some light on the impact of organized crime on contemporary conflict
dynamics, the challenges posed by criminal “spoilers” in conflict resolution and peacekeeping efforts, and
the threat posed by organized crime to security and socio-economic development in conflict and fragile
settings. Notwithstanding this increasing body of policy-research drawing attention to the links between
organized crime and violent conflict, much remains to be understood about the nature, extent and
implications of the connectivity between the two. Evidence gathered to date is limited dynamics and
mechanisms potentially at play are often difficult to research. This is compounded by the fact that what is
known about the “nexus” remains largely compartmentalized in disciplines. Multi-disciplinary approaches
are an exception rather than the rule. Furthermore, limited data has constrained our ability to accurately
measure the scope and impact of organized crime on conflict, particularly in fragile and developing contexts.
Against the backdrop of a growing preoccupation with the” crime-conflict nexus” at the UN and among
Member States, the role of research in guiding policy is essential.
This study sets out to review the state of evidence on the connection between organized crime and violent
conflict. Its purpose is to stimulate dialogue among policy actors, researchers and funders of research about
the current state of knowledge, the policy implications of existing evidence, and key gaps in our
understanding. Drawing from larger studies, it points to the most important hypotheses about the nature of
the connection between crime and violent conflict (including reference to terrorism) and describes the
implications of this “crime-conflict nexus” on conflict dynamics, conflict resolution and peace building
today. The authors recognize that the term “nexus” can conflate issues and cause a lack of clarity. The term,
however, has been kept as it also reflects the current state of knowledge on the relationship between crime
and conflict which remains rather confused and compartmentalized. The purpose of this study, therefore, is
to interrogate the nature of this “nexus” and provide a more nuanced understanding of its meaning and
implications.

This study was desk-based and included a rather extensive review of the literature on a number of subjects
including civil wars, organized crime, crime and violence prevention, terrorism, counter-terrorism, state
building, humanitarian response, development, and peace building. As the potential scope of the literature is
immense, the authors’ ability to comprehensively survey relevant research conclusions faced limits. So as to
compensate for the finite capacity of the authors, part of the research process included roundtable
discussions and key informant interviews with subject matter experts. Suffice to say, this study represents
but a snap-shot of the complex and dynamic nature of the crime-conflict “nexus”, which is inherently
difficult to research due to the limited degree of verifiable data. It should also be said that, as what is known
about the “nexus” is shaped and constrained by disciplinary divides and rather rigid conceptions of what
constitutes organized crime, conflict and terrorism, our attempt to make sense of the literature and draw
connections is admittedly incomplete and on occasion muddled. Nevertheless, by highlighting some of the
most important hypotheses and findings about the nature and implications of the crime-conflict “nexus”, it is
hoped that this study will serve as a useful basis for dialogue on the issue among policy actors, researchers
and donors.

In order to understand and assess the nature and extent of the links between organized crime and violent
conflict, it is necessary to take a closer look at the concepts in play. Their evolution over time, through
decades of research on organized crime, violent conflict and terrorism, has not only shaped our
understanding but, as will be shown in this section, has led to serious limitations in our ability to
accurately capture the dynamic nature of the crime-conflict “nexus”. As the following sections highlight,
traditional notions of what constitutes organized crime, conflict, and terrorism have become outdated.
Evidence on the ground in places such as Afghanistan, Syria, and Iraq has demonstrated how conceptions
of organized crime as exclusively profit driven and hierarchically, almost rigidly, structured, no longer
apply. Similarly, the nature of 21st century violent conflict and the actors that perpetuate this violence has
evolved beyond traditional state-based conflicts to include “non-conventional conflicts that combine
political and criminal motives. The lines that once separated organized crime from conflict and conflict
from terrorism are increasingly blurred. To effectively counter the crime-conflict “nexus” a reframing of
how we define crime, conflict and terrorism is in order The following section will describe the
limitations of some dominant approaches and highlight promising avenues uncovered by recent research
that could help depict the “nexus” in a more robust fashion.

Tamara Makarenko: The Crime–Terror Continuum: Tracing the Interplay between

Transnational Organised Crime and Terrorism

The September 11th 2001 terrorist attacks in New York and Washington DC unleashed unprecedented
academic, corporate, and government interest in uncovering the contemporary dynamics of international
terrorism. As a result, a plethora of post-9/11 literature has emerged, seeking to provide explanations of
various issues related to the terrorist threat. In addition to specific accounts of Al Qaeda, the role of
ideology, recruitment, state relations, group organisation, and target selection, have also elicited growing
analytical attention. One topic, however, that has received comparatively limited analytical interest is the
financing of terrorism. Although the immediate post- 9/11 environment—with a concentrated focus on Al
Qaeda—has provoked the need to understand hawala banking , the abuse of charities and donations from
diaspora communities, and the use of legitimate business by terrorist groups, few comprehensive accounts
of terrorist financing exist . Furthermore, despite sporadic media coverage and official references to the
use of criminal activities by terrorist groups, the relationship between organised crime and terrorism
remains under-investigated in the public domain.

Increasingly since the end of the Cold War and the subsequent decline of state sponsorship for terrorism,
organised criminal activities have become a major revenue source for terrorist groups worldwide.
Building on the precedent set by narco-terrorism, as it emerged in Latin America in the 1980s, the use of
crime has become an important factor in the evolution of terrorism. As such, the 1990s can be described
as the decade in which the crime–terror nexus was consolidated. Generally referring to the relationship
between organised crime and terrorism, the nexus most commonly applies to the straightforward use of
crime by terrorist groups as a source of funding—such as taxing the drug trade, or engaging in credit-card
fraud. The nexus has also been used to relate to the formation of alliances between criminal and terrorist
organisations. These two types of relationship constitute the major components of the nexus, as it
currently exists; however, the relationship between organised crime and terrorism has evolved into
something more complex. Taking advantage of the immediate post-Cold War environment— which
offered relatively unrestricted access to technological advancements, financial and global market
structures, diaspora communities worldwide, weak states faced with civil war, and numerous
geographical safe-havens—the distinction between political and criminal motivated violence is often
blurred. In many respects, the rise of transnational organised crime in the 1990s, and the changing nature
of terrorism, have produced two traditionally separate phenomena that have begun to reveal many
operational and organisational similarities. Security, as a result, should now be viewed as a cauldron of
traditional and emerging threats that interact with one another, and at times, converge. It is in this context
that the crime–terror continuum exists.

Outlining the Crime– Terror Continuum

Relations that have developed between transnational organised crime and terrorism are not static, but have
evolved over the past decade into a continuum that inherently seeks to trace how organisational dynamics
and the operational nature of both phenomena changes over time. The crime–terror nexus is placed on a
continuum (Figure 1) precisely because it illustrates the fact that a single group can slide up and down the
scale—between what is traditionally referred to as organised crime and terrorism—depending on the
environment in which it operates.

As depicted in Figure 1, organised crime and terrorism exist on the same plane, and thus are theoretically capable of
converging at a central point. Organised crime is situated on the far left, with traditional terrorism situated on the far
right—each holding distinct and separate positions. At the fulcrum of the continuum lies the point of ‘convergence’,
where a single entity simultaneously exhibits criminal and terrorist characteristics. In assessing the various
relationships that have developed between criminally and politically motivated groups, seven categories are
discernible—each of which are illustrated as distinct points along the continuum.

These seven points, however, can be divided into four general groups:

1) alliances,
2) operational motivations,
 3) convergence, and
4) the ‘black hole’.

I. Alliances

The first level of relationship that exists between organised crime and terrorism is the alliance. Alliances
exist at both ends of the continuum: criminal groups forming alliances with terrorist organisations, and
terrorist groups seeking alliances with criminal organisations. The nature of alliances between groups varies,
and can include one-off, short-term and long-term relationships. Furthermore, alliances include ties
established for a variety of reasons such as seeking expert knowledge (i.e. money-laundering, counterfeiting,
or bomb-making) or operational support (i.e. access to smuggling routes). In many respects alliance
formations are akin to relationships that develop within legitimate business settings. As Louise Shelley
succinctly notes with specific reference to organised crime, ‘cooperation with terrorists may have significant
benefits for organised criminals by destabilising the political structure, undermining law enforcement and
limiting the possibilities for international cooperation.’

The most commonly cited alliances exist in the realm of the international drug trade. For example,
Colombian authorities have reported that the Medellin cocaine cartel hired the ELN to plant car bombs in
1993 because they did not have the capabilities to conduct terrorist acts themselves. Furthermore, FARC has
entered into alliances with criminal groups outside of Colombia, including Mexican drug trafficking groups.
Although FARC has denied this relationship, US government officials have reported that FARC sends
cocaine to Mexico in return for arms shipments. A similar relationship was established with Russian
criminal groups who sent arms to Colombia in exchange for cocaine shipments . In addition to relatively
straightforward alliances based on the provision of specific services, more sophisticated relationships have
emerged between criminal and terrorist groups. This is best exemplified in international smuggling
operations that move various commodities from illicit narcotics, weapons and human cargo, between
countries and continents. For example the Islamic Movement of Uzbekistan entered into a strategic
relationship with the Afghan drug mafia and Central Asian criminal groups to ensure that shipments of
heroin could be safely transported between Afghanistan and the Russian Federation and the Caucasus.

There are also numerous allegations suggesting that militants linked to Al Qaeda established connections
with Bosnian criminal organisations to establish a route for trafficking Afghan heroin into Europe via the
Balkans. The Pakistan-based Indian criminal organisation, D-Company (led by Dawood Ibrahim) has
established relations to numerous terrorist groups, including Al Qaeda, the LTTE, and Lashkar e-Tayyaba.
Furthermore, it is also believed that criminal networks in southern Thailand have smuggled small arms into
Sri Lanka and the Indonesian conflict zones of Aceh, Sulawesi and Maluku - with the specific intent of
arming terrorist groups. The most illustrative nexus between a criminal and terrorist group—one in which a
mutual relationship has proven integral to the operations of both entities—is the relationship between the
Albanian mafia and the Kosovo Liberation Army (KLA) during the Kosovo conflict. After the fall of the
Albanian government in 1997, the Albanian mafia secured its authority over heroin-trafficking routes
through the Balkans. At approximately the same time, the KLA was established to seek an
independent state from Serbia. As noted in a report published in the Washington Times, a very specific
relationship developed between the political wing of the KLA— the Kosovo National Front (KLF)—and
Albanian criminal groups to smuggle heroin. These ties thus ‘provided a well-oiled arrangement: the profits
from the Pristina cartel, estimated to be in the ‘high tens of millions’, were funnelled to the KLA, where they
were used primarily to buy weapons, often in ‘drugs-for-arms’ arrangements’.

This relationship, however, is significantly more complex than the straightforward alliance discussed here,
and in fact, both the Albanian mafia and KLA could be considered hybrid groups based on the nature of
their activities throughout the 1990s. As illustrated in the examples cited above, in most instances the ties
that have developed between organised crime and terrorism have been isolated in specific geographic
regions. This indicates that it is in the interest of criminal and terrorist groups—invariably within unstable
regions—to form alliances to ensure that an environment conducive to both their needs is sustained.
Instability is in the interest of terrorists because it diminishes the legitimacy of governments in the eyes of
the mass populations—the very people terrorists seek to gain support from; and it is in the interest of
criminal groups seeking to maximise criminal operations. This is especially true for groups engaged in wide-
scale smuggling of licit or illicit commodities. For this reason, crime–terrorist alliances have been especially
common in Latin America, Southeast Asia, the Middle East, and Eurasia.

II. Operational motivations

Despite the existence of alliances between organised crime and terrorist groups, groups have increasingly
sought to forgo creating alliances if they can. As the 1990s progressed, it became apparent that criminal and
terrorist groups were seeking to ‘mutate their own structure and organisation to take on a non-traditional,
financial, or political role, rather than cooperate with groups who are already effective in those activities’.
The primary reason for acquiring in-house capabilities is to ensure organisational security, and to secure
organisational operations. In doing so criminal and terrorist groups have sought to avoid the inherent
problems present in all alliances, including: differences over priorities and strategies, distrust, the danger of
defections, and the threat that alliances could create competitors. Thus most criminal and terrorist groups
operational in the 1990s and into the twenty-first century have developed the capacity to engage in both
criminal and terrorist activities.

Criminal groups using terrorism as an operational tool, and terrorist groups taking part in criminal activities
as an operational tool, constitute the second component of the crime–terror continuum. Although the use of
terror tactics can be traced back into the history of organised crime, terrorist engagement in organised crime
to secure profits for future operations did not emerge as a serious problem until the early 1990s. In both
cases, however, the post-Cold War era exacerbated conditions and drove many criminal and terrorist groups
to shift their operational focus. As a result, criminal groups have increasingly engaged in political activity in
an effort to manipulate operational conditions present in the rising numbers of weak states; whereas terrorist
groups have increasingly focused on criminal activities to replace lost financial support from state sponsors.

Organised criminal groups have regularly used terror tactics in order to fulfil specific operational aims.
Although these groups have, at times, apparently engaged the political, it is important to clarify that their
intention was not to change the status quo, but merely to secure their operational environment. As Dishman
notes, criminal organisations use ‘selective and calibrated violence to destroy competitors or threaten
counternarcotics authorities. As such, a violent attack directed by a TCO [transnational criminal organisation]
is intended for a specific ‘anti-constituency’ rather than a national or international audience, and it is not
laced with political rhetoric’. Despite utilising terror tactics, such as bombings and assassinations, the
primary motivation of these groups often remains illicit profit-maximisation. For example, terror tactics
were utilised by the Italian Mafia in the 1990s in response to a relatively successful government drive to
counter the influence of the Italian Mafia in the country. As early as 1990, the Italian government’s Anti-
Mafia Commission reported that because the Mafia controlled political, institutional and economic powers
and had a monopoly over the use of violence, it was evident that the Mafia had moved from a strategy of
cohabitation with the legal power to one of confrontation. Further illustrating this point, Alison Jamieson has
argued that bombing against tourist attractions by the Italian Mafia in the early 1990s revealed a distinct
deviation from the understanding that organised crime sought to remain unnoticed by the majority of the
population.

Instead: " The traditional Mafia groups have learned to use the magnifying glass of symbolic violence to
reach a wider audience: in 1993 the Sicilian Mafia carried out a series of car bomb attacks in the Italian
mainland near historic sites such as the Uffizi Galleries in Florence and the church of St. John Lateran in
Rome; plans were laid to blow up the Leaning Tower of Pisa. The aim was not to eliminate an enemy, but to
intimidate public opinion and Parliament into abrogating recently passed antimafia legislation". Terror
tactics were thus used by the Mafia to ‘subvert anti-Mafia actions and legislative moves, these bombings
were meant to openly challenge the political elite and send a message to the ‘powers-that-be’. Comparable
with any traditional terrorist group, the Mafia engaged in terrorism as a tactical tool to force the government
into negotiation and compromise.

More recently, criminal groups in Brazil have also realised the potential effectiveness of using terror tactics
to force political demands on the government, especially when their illicit operations are threatened by the
state. Following the inauguration of a new Brazilian administration in April 2002, and the rising power of
indigenous drug traffickers, authorities were immediately tasked with cracking down on criminal groups—
especially those operating from Rio de Janeiro. Imposing tougher restrictions on group leaders in the prison
system—including Comando Vermelho, Amigos dos Amigos, and Terceiro Comando—the government
provoked these groups into ‘launching a campaign of political violence’. During this time members of the
aforementioned groups bombed buses, fired shots at government buildings, and targeted police officers. This
wave of violence dissipated only after the state appeared to grant the criminal group leaders immunity in
order to continue conducting their criminal operations with limited obstacles.

Comparable to criminal groups engaging in terrorism; many terrorist groups have become well versed in the
conduct of criminal operations. In response to the virtual elimination of state support after the end of the
Cold War, criminality was the most pragmatic avenue to secure finances for future terrorist operations.
Equally important to note is that terrorists who engage in criminal activities ‘ostensibly retain paramount
political objectives, and as such, ill-gotten monies serve only as a means to effectively reach their political
ends’. The most common criminal activity terrorist groups have been involved in is the illicit drug trade.
Since the 1970s groups such as FARC, Basque Homeland and Freedom movement (ETA), the Kurdistan
Workers Party (PKK), and Sendero Luminoso have all been linked to the drugs trade. Taking advantage of
its geographic co-location with the Balkan Route, which is used to smuggle heroin from Asia to Europe, the
PKK has garnered the majority of its profits from illicit drug operations. Its position within the drug trade
also ‘links members of the PKK to high-ranking members of the Turkish government, and major organised
crime groups in Istanbul’ . Since the early 1990s additional groups, including Hizbullah, have also realised
the financial gains of participating in the illicit drugs trade. It is alleged that Hizbullah protects heroin and
cocaine laboratories in the Bekaa Valley.

Although terrorist groups have commonly been associated with trafficking in illicit narcotics, they have also
engaged in a wide variety of other crimes such as fraud, counterfeiting and human smuggling. According to
Rohan Gunaratna, Al Qaeda’s financial network in Europe, dominated by Algerians, is largely reliant on
credit-card fraud . Gunaratna quotes that nearly US$1 million a month has been raised from these alternative
criminal avenues. Furthermore, European security agencies have admitted that prosecuting terrorists
engaged in credit-card fraud has been a daunting task because ‘al-Qaeda’s cadres are continually learning
new techniques to evade detection’ —illustrating the extent to which Al Qaeda has manipulated processes of
globalisation and its networked organisation. Terrorist groups have similarly used the trade in counterfeit
products as a source of profit. According to Ronald Noble, Secretary General of Interpol, paramilitary
groups in Northern Ireland, and Albanian extremist groups are heavily engaged in moving counterfeit
products, from cigarettes to computer software.

As the 1990s progressed and both criminal and terrorist groups incorporated economic and political
capabilities into their remit, many groups lost sight of their original motivations and aims. Thus at the start
of the twenty-first century a growing number of groups have simultaneously displayed characteristics of
organised crime and terrorism. Furthermore, in assessing the development of these hybrid organisations, it is
evident that the motivations, organisation, and operations of criminal and terrorist groups have also
converged—thus making it analytically difficult to make a distinction between the two phenomena.

III. Convergence

The final point occupying the crime–terror continuum is the ‘convergence thesis’, which refers explicitly to
the idea that criminal and terrorist organisations could converge into a single entity that initially displays
characteristics of both groups simultaneously; but has the potential to transform itself into an entity situated
at the opposite end of the continuum from which it began. Transformation thus occurs to such a degree ‘that
the ultimate aims and motivations of the organisation have actually changed. In these cases, the groups no
longer retain the defining points that had hitherto made them a political or criminal group’.

Terrorists and insurgents increasingly are turning to TOC to generate funding and acquire logistical support
to carry out their violent acts. The Department of Justice reports that 29 of the 63 organizations on its FY
2010 Consolidated Priority Organization Targets list, which includes the most significant international drug
trafficking organizations (DTOs) threatening the United States, were associated with terrorist groups.
Involvement in the drug trade by the Taliban and the Revolutionary Armed Forces of Colombia (FARC) is
critical to the ability of these groups to fund terrorist activity. We are concerned about Hizballah’s drug and
criminal activities, as well as indications of links between al-Qa`ida in the Lands of the Islamic Maghreb and
the drug trade. Further, the terrorist organization al-Shabaab has engaged in criminal activities such as
kidnapping for ransom and extortion, and may derive limited fees from extortion or protection of pirates to
generate funding for its operations. While the crime-terror nexus is still mostly opportunistic, this nexus is
critical nonetheless, especially if it were to involve the successful criminal transfer of WMD material to
terrorists or their penetration of human smuggling networks as a means for terrorists to enter the United
States.

In its most basic form, the convergence thesis includes two independent, yet related, components. First, it
incorporates criminal groups that display political motivations; and second, it refers to terrorist groups who
are equally interested in criminal profits, but ultimately begin to use their political rhetoric as a facade solely
for perpetrating criminal activities. The first category can be further subdivided into two parts. First, it
includes groups who have used terror tactics to gain political leverage beyond the disruption of judicial
processes or attempts to block anti-crime legislation (which is a common tactic utilised by organised crime
in order to secure their operations). Instead they are interested in attaining political control via direct
involvement in the political processes and institutions of a state. Second, it includes criminal organisations
that initially use terrorism to establish a monopoly over lucrative economic sectors of a state.
There are also a number of inherent organizational and operational similarities between organized crime
and terror groups. If one considers a Venn diagram that compares the character and modus operandi of these
two groups, similarities quickly emerge. During an April 2003 meeting with South American
counterterrorism officials and intelligence officers in Argentina, it was encouraging, yet worrisome to see
that one of the visiting counterterrorism chiefs had a well-developed project focusing on the “nexus” issue.
It is instructive to look at how this intelligence official and several of his colleagues have sought to compare
and contrast organized crime and terrorist groups.

Similarities between organized crime and terrorist groups:-

 Both are generally rational actors.
 Both use extreme violence and the threat of reprisals.
 Both use kidnappings, assassinations, and extortion.
 Both operate secretly, though at times publicly in friendly territory.
 Both defy the state and the rule of law (except when there is state sponsorship).
 For a member to leave either group is rare and often fatal.
 Both present an asymmetrical threat to the United States and “friendly” nations.
 Both can have “interchangeable” recruitment pools.
 Both are highly adaptable, innovative and resilient.
 Both have back-up leaders and foot soldiers
 Both have provided social services, though this is much more frequently seen with terrorist groups.

Argentina, in fact, experienced one of the first attacks borne of the convergence of terrorism, state
sponsorship and organized crime. The 1992 and 1994 bombings of the Israeli Embassy and Jewish Cultural
Affairs Centre in Buenos Aires were conducted with truck bombs. The operators were Iranian-supported
Hezbollah who used the notoriously lawless tri-border region of Argentina, Brazil and Paraguay to plan and
prepare for their terrorist operation. It was there that members of Middle Eastern terror groups including
Hezbollah, Hamas and Gamaa al Islamiyah have taken advantage of a Muslim diaspora in a region known
for money laundering, drug trafficking and other illicit activities. Argentine intelligence officials indicated
that the trucks and the explosives used in the Buenos Aires bombings were paid for and assembled in the tri-
border region, and were then transported through a criminal network on their journey to the Argentine
capital.

Both organized crime and terrorist groups run in the same circles— they already operate outside of the law
and they often need the same resources, including: false identification, shipping documents, operators,
transportation networks, and counter-surveillance techniques. Terrorist groups just beginning to develop
their own revenue generation enterprises often come into contact (sometimes hostile) with criminal elements
who generally have reliable revenue streams.
In controlling economic sectors—including strategic natural resources—and financial institutions, these
entities proceed to ultimately gain political control over the state itself. This is based on the premise that in a
contemporary world dominated by the dynamics of the free market economy, economic strength is the
obvious prerequisite for political power; and political power subsequently sustains both the life of the
organisation and its activities—be they criminal and/or political. As Xavier Raufer notes, ‘Grabbing control
of financial institutions can both bring home the cash and advance political ambitions. Many groups, of
course, will retain narrow portfolios of objectives, targets, and methods; others are becoming conglomerates
of causes’.

Apart from narcotics trafficking, there are a number of other notable examples of cooperation between
terrorist and organized crime organizations:

 The Irish Republican Army (IRA) and FARC. Three IRA operatives are currently on trial in
Colombia for aiding the FARC in designing gas-cylinder bombs and other devices of urban warfare
perfected in Northern Ireland. This is an excellent example of what national security analysts refer to
as “one-offs,” temporary alliances designed for a specific operation or need.

 Intellectual Property Crime (IPC). IPC is one of the fastest growing forms of organized crime, and
according to Interpol Secretary General Ronald Noble, it is becoming the crime of choice for terrorist
groups. IPC has low entry costs and high profit margins. IPC perpetrators feel relatively immune
from capture and prosecution because this form of criminal activity has become so widespread.

 Trading narcotics for weapons. This type of transaction has presented itself as one of the most lethal
problems for the United States. Colombia’s AUC terrorist paramilitary force was stopped in
September 2002 through Operation White Terror for attempting to trade drugs for massive quantities
of weapons in 2002. Of even greater concern was the September 2002 Hong Kong arrest of three
people who attempted to exchange heroin for U.S. Stinger anti-aircraft missiles that they intended to
re-sell to al Qaeda.

 Communications technology. Recognizing that the United States excels at electronic and signals
intelligence gathering, terrorist and organized crime groups seek to minimize their electronic
communications footprint. Narcotics traffickers in Colombia have for years possessed some of the
top encryption technology on the market. In fact, at certain points over the past ten years, narcotics
cartels have acquired more advanced equipment that their U.S. law enforcement pursuers. Today,
groups such as al Qaeda are forgoing regular use of cell and satellite phones on account of the same
U.S. surveillance. The narco-traffickers’ experience has been instructive to the likes of Osama Bin
Laden, Hezbollah, and others.

Actual contact between organized crime groups and terror groups need not occur for the two entities to
adopt each other’s tactics and characteristics. Terror groups have embraced (either by choice or necessity) a
long-standing structural feature of organized crime: working through affiliated operational cells which
have minimal connections to the leadership. Loosely networked cell structures effectively frustrate law
enforcement and intelligence penetration. This structure also enables tremendous operational flexibility, in
stark contrast to the rigidity characteristic of governmental law enforcement and intelligence forces. This
flexibility allows terrorist and organized crime groups to set up or close down operations overnight, maintain
distance between operational and planning cells, move and use financial resources quickly and secretively,
and make decisions without headquarters’ approval. This distribution of power and authority also reduces
the possibility of a decapitating strike that could close down the organization.

Russian and Albanian criminal organisations provide such examples of ‘conglomerates of causes’ as both
groups seek to produce an environment once only associated with terrorism: to ‘break or ruin the sense of
social and political calm in a country’. In several regions of the Russian Federation—including the Maritime
Province of the Russian Far East—and in Albania, organised criminals have found that ‘in order to mobilise
sufficient power to resist the state, they must move their organisations beyond pure criminalism with its
limited appeal to most citizens and add elements of political protest’. Commenting specifically on the rise of
the Albanian Mafia, Ralf Mutschke of Interpol has called it a ‘hybrid’ group because its activities indicate
that its ‘political and criminal activities are deeply intertwined’. Mutschke further notes that the Albanian
mafia is intrinsically linked to ‘Panalbanian ideals, politics, military activities and terrorism,’ explaining
why Albanian criminal organisations used their criminal profits to purchase arms and military equipment for
the Kosovo Liberation Army from 1993 . Contributing to the convergence between crime and politics in
Albania is the fact that Albanian criminal and terrorist groups have an interchangeable membership and
recruitment base—essentially posing as terrorists by day and criminals by night.

Terrorism may serve as a “tactic” for criminal groups, whereas criminal activity may become a permanent
necessity for terror groups lacking sufficient sources of funding. It appears more likely that terror groups
would evolve into hybrid groups whereas criminal groups would unleash a terrorist style attack only when
necessary. However, even if terror groups and criminal groups do not enter into strategic alliances, some
may transform into true hybrids. It is conceivable that the world may face a number of transnational
criminal-terrorist cartels that dwarf the Colombian cartels and al Qaedas of the 1990s and today. These
groups could even attain political influence and enough power to bring down weak or “uncooperative” states.

The second component of the convergence thesis addresses terrorist groups that become so engaged with
their involvement in criminal activities (as discussed in the previous section) that they merely maintain their
political rhetoric as a facade for perpetrating criminal activities on a wider scale. There is growing evidence
indicating that despite increasingly focusing on criminal activities, terrorist groups ‘maintain a public facade,
supported by rhetoric and statements, but underneath, they have transformed into a different type of group
with a different end game’. No longer driven by a political agenda, but by the proceeds of crime, these
formerly traditional terrorist groups continue to engage in the use of terror tactics for two primary reasons.
First, to keep the government and law enforcement authorities focused on political issues and problems, as
opposed to initiating criminal investigations. Second, terror tactics continue to be used as a tool for these
groups to assert themselves amongst rival criminal groups. Added to this, by continuing to portray their
political component to the public domain, these terrorist groups are able to manipulate the terrorist support
network that had previously been put in place. For example, they continue to focus on political grievances
(combined with financial rewards) to attract recruits—giving justification to what would normally be
regarded as purely criminal acts. Thus by simultaneously focusing on criminal and political goals, these
groups are able to use two sets of networks which allow them to ‘shift focus from one application of
terrorism to another, or to pursue multiple applications simultaneously’.

Groups that are illustrative of a terrorist entity evolving into a group primarily engaged in criminal activities
include Abu Sayyaf, the Islamic Movement of Uzbekistan , and the Revolutionary Armed Forces of
Colombia (FARC). For example, since 2000, Abu Sayyaf has been primarily engaged in criminal activities
such as kidnapping operations, and most recently, operating marijuana plantations in the Philippines. It has
been estimated that in 2000 alone, kidnapping deals garnered Abu Sayyaf $20 million. In light of Abu
Sayyaf’s operations, which are focused on criminal activities, there is little indication that the group remains
driven by its original political aim, which was to establish an independent Islamic republic in territory
currently comprising Mindanao, surrounding islands, and the Sulu Archipelago.

By the mid-1990s, following the death of Jacobo Arenas—the ideological leader of FARC—FARC, as
subsequently happened with Abu Sayyaf—deepened its involvement in criminal activities. More specifically,
several FARC units shifted their involvement in the regional drugs trade from that of protector of crops and
laboratories, to ‘middlemen’ between farmers and illicit drug cartels. This shift directly resulted in the group
acquiring more profits from the drugs trade, and subsequently more power within Colombia. Thus, by 2000,
it was believed that FARC controlled 40 percent of Colombian territory, and received revenues of $500
million annually from illicit narcotics . Supplementing its bankroll from drugs, FARC also engages in other
criminal activities, including kidnapping and extortion. Referring to both FARC and the ELN, Paul
Wilkinson concludes that because of the level of their involvement in organised crime, " . . .it is clear that
this has made them, both in reality and popular perception, little more than a branch of organised crime,
decadent guerrillas rather than genuine revolutionaries, irredeemably corrupted by their intimate
involvement with narcotraffickers and their cynical pursuits of huge profits from kidnapping and from their
‘protection’ of coca and opium production, processing and shipping facilities." Thus, in the Colombian
context groups such as FARC, once ‘impassioned and ideological’, have ‘lost their old revolutionary “purity”
and turned their terrorism in a new direction—development as criminal cartels’.
Although the entire crime–terror continuum poses a threat to international security, arguably the single
greatest threat emanating from the convergence of transnational organised crime and terrorism is that which
is exhibited at the fulcrum point.

IV. ‘Black Hole’ Thesis

This section of the crime–terror continuum specifically refers to the situations in which weak or failed states
foster the convergence between transnational organised crime and terrorism, and ultimately create a safe
haven for the continued operations of convergent groups. The ‘black hole’ syndrome encompasses two
situations: first, where the primary motivations of groups engaged in a civil war evolves from a focus on
political aims to a focus on criminal aims; second, it refers to the emergence of a ‘black hole’ state—a state
successfully taken over by a hybrid group as outlined in the previous section. What these two scenarios have
in common, and the reason why they perfectly illustrate the most extreme point along the continuum, is that
they reveal the ultimate danger of the convergence between these two threats: the creation or promotion of a
condition of civil (or regional) war to secure economic and political power. States that fall within this
category, as a result of current or past experiences, include Afghanistan, Angola, Myanmar, North Korea,
Sierra Leone, and Tajikistan. Furthermore, areas in Pakistan (the Northwest Frontier Province), Indonesia
and Thailand—where government control is extremely weak—are also in danger of succumbing to the
‘black hole’ syndrome.

To begin with, evidence suggests that the dynamics of civil wars, just like the dynamics of traditional
organised crime and terrorism, have changed. They have evolved from wars fought for ideological or
religious motivations to wars hijacked by criminal interests and secured by terror tactics. As David Keen
comments, ‘Increasingly, civil wars that appear to have begun with political aims have mutated into
conflicts in which short-term economic benefits are paramount. While ideology and identity remain
important in understanding conflict, they may not tell the whole story’. The end of the Cold War, coupled
with the decline of superpower support (proxy wars) indirectly caused a decline in the strength of
revolutionary political ideologies in groups such as the Khmer Rouge and UNITA. All of these groups thus
‘gravitated from a strong ideological agenda to one dominated by economic aims’. Comparable to terrorist
groups who lost sight of their political ideology as a result of having to depend on criminal activity for their
survival, these groups also appear to have betrayed their ideological ideals in the interest of holding on to
power at whatever cost . Two examples that illustrate this aspect of the ‘black hole’ syndrome are
Afghanistan and North Korea.

Afghanistan could be considered a ‘black hole state’ since the 1989 withdrawal of Soviet troops, for several
reasons. First, although factions fighting in the Afghan civil war (notably the Northern Alliance) officially
articulated ideological goals, their involvement in criminal activities, and frequent changes in group
allegiances and alliances, indicate that group survival was their paramount concern. In the absence of any
central authority capable of establishing widespread stability and order, warlords were able to divide the
country into local fiefdoms to secure territorial control in order to sustain activities such as the production
and trafficking of opiates and the smuggling of weapons and a variety of licit commodities (specifically
pharmaceuticals) across the border with Pakistan. Second, as a result of incessant instability sustained by
rival warlord factions, Afghanistan became an important safe haven, congregation, and training point for a
number of terrorist groups, and transnational criminal organisations. The cauldron of terrorist and criminal
interests converging and cooperating in Afghanistan therefore illustrates the dangers inherent in the ‘black
hole’ syndrome. Not only was Afghanistan destroyed by incessant domestic instability, its very essence as a
‘black hole state’ meant that it directly threatened the security of the wider region. Furthermore, Afghanistan
proved to be a direct security threat to the United States, Southeast Asia, and the rest of the world, primarily
because it fostered the rise and global reach of Al Qaeda.

While it exhibits some characteristics of a weak state, the Democratic People’s Republic of Korea (DPRK)
is most illustrative of a criminal state. Officials of the DPRK have allegedly been directly engaging in
criminal activities since the 1970s. For example, in 1976 the Norwegian government expelled all the staff of
the North Korean embassy, suggesting they were involved in the smuggling of narcotics and unlicensed
goods. The DPRK has intensified its criminal activities over the last decade—arguably because the
leadership in North Korea has been replaced ‘by a younger group, less committed to the dogma of socialism
and seemingly more eager to experience the good life’ . An indication of this development is the
government’s establishment of ‘Bureau 39’, an official government department tasked with generating hard
currency by any means, including drug trafficking, counterfeiting, money laundering and piracy .

The second scenario, on the other hand, refers to the situation where politically motivated criminal
organisations or commercial terrorist groups perpetuate their existence and activities by promoting domestic
and/or regional instability. Although political goals may have played a role in the initial emergence of
instability, after a time it became evident that economic motivations took precedence. Terror tactics are
utilised to sustain criminal activities, and it may be concluded that many ongoing civil wars are merely
draped in ideological rhetoric to gain legitimacy and to ensure a steady supply of new recruits. There is
growing evidence that these non-state actors are producing alternative economic and political structures in
the absence of a strong state. In fact, criminal and terrorist groups in weak states have already constituted de
facto governments who imitate the characteristics of formal state activities, despite perpetuating their
involvement in activities considered illegal by formal state structures.

It may be suggested that this aspect of the ‘black hole’ syndrome is the natural progression of political
criminal organisations or commercial terrorist groups gaining economic and political control over a parcel of
territory or an entire state. In an effort to secure an environment conducive to their criminality, these entities
may seek to wreak havoc and instability in the areas of their main operations. A successful criminal
organisation with political interests or a commercial terrorist group, however, will effectively challenge the
legitimacy of a state, and ultimately replace the state in many (if not all) of its functions. The basic
characteristics of this predicament are evident in numerous examples, including ongoing instability in the
Balkans , Caucasus , southern Thailand and Sierra Leone. Taking Sierra Leone as an illustrative example,
the descent into state terrorism was not accompanied by an exclusive ‘logic of political violence,’ but it was
intertwined with the ‘logics of banditry, hedonism and brutality’ and was intrinsically linked to the illicit
trade in diamonds. Crime was an integral component of the Revolutionary United Forces (RUF) that took
precedence over any political aim. Any belief in the existence of a political component to the violence that
penetrated Sierra Leone throughout the 1990s is amply eradicated once the following points are
considered: " The ‘rebellion’ has had no known spokesmen or political program; it does not seem to have
the goal of gaining political power. It has no reason to appeal politically to the population in the areas in
which it is active; its ‘strategy’ is marauding terror of the subject population and denying control to the
government so that the government cannot suppress its lawlessness. The fact that government forces have
been known to act as atrociously as the rebels does not improve matters . " In both contexts of the ‘black
hole’ syndrome, it may be concluded that war has provided ‘legitimation for various criminal forms of
private aggrandisement while at the same time these are necessary sources of revenue in order to sustain the
war. The warring parties need more or less permanent conflict both to reproduce their positions of power
and for access to resources’. Thus, regardless of whether these civil wars began with an ideological agenda
and transformed into a criminal struggle, or emerged because of the successful operations of politically
motivated criminal organisations or commercial terrorist groups, they share several common characteristics.

To begin with, conflict that besets the ‘black hole’ syndrome has no clear military objective and lacks
political purpose. Instead, military units constitute ‘little more than marauding bands acting quite
independently of any order and showing no discipline whatsoever in the actions they were committing’ .
Furthermore, where political motivations do follow the criminal activities of belligerents in violent conflicts,
it is evident that the perpetuation of conflict, as opposed to victory, becomes a priority in order to create
ideal conditions for transnational criminal activities to
flourish . Groups that thrive within ‘black hole’ environments are all equally motivated by the ‘accumulation
of wealth, control of territory and people, freedom of movement and action, and legitimacy. Together, these
elements represent usable power—power to allocate values and resources in society’

Future Dynamics

As outlined in this article, the relationship between transnational organised crime and terrorism encompasses
several distinct facets—each of which may be placed along a continuum that traces the evolution of groups
depending on the predominant operational environment. During the Cold War, concerns about a crime–
terror nexus were relatively insignificant, as nexus was almost entirely precluded to the relationship between
insurgent groups in Latin America and regional drug cartels. However, the international environment that
emerged at the end of the Cold War, and subsequently as a result of the fall of the Soviet Union, created
conditions that supported the development of criminal and terrorist organisations into increasingly
sophisticated and international entities. The result being the emergence of transnational organised crime, and
international networked terrorist groups as exemplified by Al Qaeda. Each of these groups created a state of
heightened insecurity within the world as governments accustomed to military threats posed by state-actors
were forced to react to the economic and societal destruction increasingly perpetrated by non-state actors.
Growing reliance on cross-border criminal activities—facilitated by open borders, weak states, immigration
flows, financial technology, and a highly intricate and accessible global transportation infrastructure—and
an associated interest in establishing political control in order to consolidate and secure future operations,
have all contributed to the rise of the crime–terror nexus. As a result, non-state actors, in the guise of
transnational organised crime and terrorism, are directly challenging the security of the state—arguably for
the first time in history. The realisation that economic and political power enhance one another, suggests that
more and more groups will become hybrid organisations by nature. This is enhanced by the fact
that criminal and terrorist groups appear to be learning from one another, and adapting to each other’s
successes and failures. Furthermore, given the unremitting existence of territory that is not adequately under
state control—such as the Northwest Frontier Province of Pakistan, areas within Tajikistan, and the
Triborder Region—environments that provoke and promote strengthened ties between organised crime and
terrorism endure.

Considering the various components of the crime–terror continuum, one consistent and relatively easily
identifiable factor is criminality. Regardless of where a group sits along the continuum (apart for each
extreme end), every point necessitates some degree of involvement with criminal activities. As a result, the
continuum inherently implies that focusing on criminal activity, as opposed to political aims and motivations,
in formulating policy responses to—especially to terrorism—has been under-utilised. Thus, for example,
although it is important to understand the political motivations of terrorist groups, on a practical level
counterterrorist policy and initiatives would likely meet with greater initial success in locating group
weaknesses and vulnerabilities if they focused on criminal aspects. Furthermore, limiting access to lucrative
profits from illicit activities simultaneously eliminates the operational capacity, and subsequent political
influence, of both criminal and terrorist groups. Thus, it is essential that greater attention and resources are
given to cutting off funds acquired through crime (in particular credit-card and insurance fraud,
money laundering, smuggling), or on criminal services that terrorist groups depend on (such as document
and identity fraud) operational environment. During the Cold War, concerns about a crime–terror nexus
were relatively insignificant, as nexus was almost entirely precluded to the relationship between insurgent
groups in Latin America and regional drug cartels.

However, the international environment that emerged at the end of the Cold War, and subsequently as a
result of the fall of the Soviet Union, created conditions that supported the development of criminal and
terrorist organisations into increasingly sophisticated and international entities. The result being the
emergence of transnational organised crime, and international networked terrorist groups as exemplified by
Al Qaeda. Each of these groups created a state of heightened insecurity within the world as governments
accustomed to military threats posed by state-actors were forced to react to the economic and societal
destruction increasingly perpetrated by non-state actors.

Growing reliance on cross-border criminal activities—facilitated by open borders, weak states, immigration
flows, financial technology, and a highly intricate and accessible global transportation infrastructure—and
an associated interest in establishing political control in order to consolidate and secure future operations,
have all contributed to the rise of the crime–terror nexus. As a result, non-state actors, in the guise of
transnational organised crime and terrorism, are directly challenging the security of the state—arguably for
the first time in history. The realisation that economic and political power enhance one another, suggests that
more and more groups will become hybrid organisations by nature. This is enhanced by the fact that
criminal and terrorist groups appear to be learning from one another, and adapting to each other’s successes
and failures. Furthermore, given the unremitting existence of territory that is not adequately under state
control—such as the Northwest Frontier Province of Pakistan, areas within Tajikistan, and the Triborder
Region—environments that provoke and promote strengthened ties between organised crime and terrorism
endure.
Considering the various components of the crime–terror continuum, one consistent and relatively easily
identifiable factor is criminality. Regardless of where a group sits along the continuum (apart for each
extreme end), every point necessitates some degree of involvement with criminal activities. As a result, the
continuum inherently implies that focusing on criminal activity, as opposed to political aims and motivations,
in formulating policy responses to—especially to terrorism—has been under-utilised. Thus, for example,
although it is important to understand the political motivations of terrorist groups, on a practical level
counterterrorist policy and initiatives would likely meet with greater initial success in locating group
weaknesses and vulnerabilities if they focused on criminal aspects. Furthermore, limiting access to lucrative
profits from illicit activities simultaneously eliminates the operational capacity, and subsequent political
influence, of both criminal and terrorist groups. Thus, it is essential that greater attention and resources are
given to cutting off funds acquired through crime (in particular credit-card and insurance fraud, money
laundering, smuggling), or on criminal services that terrorist groups depend on (such as document and
identity fraud) Understanding the crime–terror continuum expands the security tools that a state can employ
in order to respond to the ever-evolving threats of transnational organised crime and terrorism.

Acknowledging, and continuously tracing, the crime–terror continuum as it pertains to the evolving
dynamics of transnational organised crime and terrorism will therefore have an explicit impact on the
formation of counterterrorist and anti-crime policies. The crime–terror continuum thus seeks to highlight
the importance of overlapping counter-terrorist and anti-crime policies as a way of formulating an effective
state response to both evolving, and periodically converging, threats.

A Hypothesis of Convergence

If there is a nexus anywhere, it is between terrorist organizations on one side and organized crime
activities on the other. This is the 600 pound gorilla. The use of organized crime activities by terrorists is
widespread and has become even more prevalent, especially for groups involved in global jihad, in the years
since September 11. As other funding sources, such as diversions from Islamic charities have been
restricted, global jihad groups have increasingly resorted to criminal activities, which do not have a steep
learning curve in terms of acquiring basic competencies. Moreover, the criminalization process is facilitated
by the fact that many terrorist organizations operate in, from, or through lawless areas where state capacity
is weak or state authority is absent. It is also fairly easy for terrorist organizations to justify or rationalize
these criminal activities, either by claims that the end justifies the means or by the argument that these
activities are directed against the enemy. Terrorist organizations raising money through drug trafficking, for
example, legitimize their activities by emphasizing the drugs will be consumed by infidels.

In the last two decades, suggestions have been made that there might be some links between the two
phenomena. This began with the discovery of narco-terrorism in the 1980s when it was found that drug
trafficking was also used to advance the political objectives of certain governments and terrorist
organizations. Terrorists are happy to seize any opportunity to call what they are doing “political”, wrote R.
Ehrenfeld, while drug traffickers were always seen as purely criminal.“When the two combine, terrorist
organizations derive benefits from the drug trade with no loss of status, and drug traffickers who have forged
an alliance with terrorists become more formidable and gain in political clout” (Ehrenfeld, 1990:xix). This
notion has now been adopted by various authors. “Although they are distinct phenomena that should not be
confused,” A.P. Schmid (1996: 40) wrote in an influential first article on this new phenomenon, “there are
links” and “there is some common ground”.

In recent books on both of these phenomena, references are also made to other forms of crime. In
Organized Crime, M. Lyman and G. Potter (1977: 307) devoted a special chapter to terrorism and noted that
“political agendas and profit motivation may be concurrent variables in many acts of terrorism”. In The New
Terrorism, W. Laqueur (1999: 211) wrote an entire chapter about the cooperation between the two because
“in some cases a symbiosis between terrorism and organized crime has occurred that did not exist before”.

On 28 September 2001, less than three weeks after the dramatic events of September 11 in New York
and Washington, the Security Council of the United Nations adopted a wide-ranging anti-terrorism
resolution (SC res. 1373) in which it “notes with concern the close connection between international
terrorism and transnational organized crime, illicit drugs, money-laundering, illegal arms-trafficking, and
illegal movement of nuclear, chemical, biological and other potentially deadly materials”. Yet is still unclear
what exactly the “close connection” consists of, and further research is warranted. In a paper presented at a
conference of the International Scientific and Professional Advisory Council of the United Nations Crime
Prevention and Criminal Justice Programme (ISPAC), A.P. Schmid (2004:191) suggests there may be
connections that take the form of associations, alliances, cooperation, confluence, convergence or symbiosis.
Other analysts (Williams & Savona, 1995: 3; Williams & Godson, 2002:320; Schweitzer, 2002: 288) went
further and suggested the theoretical possibility that in concrete cases, terrorism can change into organized
crime and vice versa. Some (Makarenko, 2001:22-24)even consider the possibility that terrorism and
organized crime might totally converge and become one and the same. T. Makarenko (2003)makes an
interesting classification effort by placing various types of convergence on a continuum with organized
crime at one end and terrorism at the other. This opens the question: how do specific underground
organisations move from one type to the other?

Various authors keep referring to more or less the same examples, the FARC in Colombia, Sendero
Luminoso in Peru, guerrilla fighters in Chechnya, the Abu Sayyaf Group in the Philippines, the IMU in
Uzbekistan and a few others. It is striking that none of them provide a thorough empirical analysis of any of
these cases and the evidence cited never goes much deeper than a good media account. This is not meant to
belittle good journalism but even good reporters may miss to ask the right analytical questions for lack of an
adequate analytical framework.

Some specialists in organized crime or terrorism doubt there are really any clear connections between
the two. A.P. Schmid cited two authorities in his ISPAC paper: Mark Galeotti who noted that “until now,
fears of international alliances between terrorists and criminals have proven to be exaggerated” (Schmid,
2004:203) and Louise Shelley who suggested that “[t]he links between organized criminals and terrorists are
much less frequent than the links between organized criminals and politicians” (Schmid, 2004: 197). R.T.
Naylor (2002: 56-57) found some examples of opportunistic alliances between the two. Indeed some
guerrilla organizations or some of their militants do resort to simple criminality. Yet upon closer inspection
some supposed alliances often prove to be merely ephemeral, or, in the words of Naylor, “[a]t the end of
their cooperation the two groups usually end up on opposite sides of the barricades”. It is striking that most
authors generally fail to present empirically founded analyses to prove their case. They are making little
more than educated guesses, according to A.P. Schmid.

Who is right? What we would like to do in the following is, first, survey the theoretical
considerations presented by the supporters of the confluence hypothesis. It is not enough to demonstrate, as
is generally done, that there are structural similarities between the two types of crime. We also need to
understand the mechanisms enabling them to work together. Subsequently, we would like to address the
arguments of authors who deny the existence of any such connections or do not feel they are significant in
any way. This brings us to the question – in the event of any such links or merger – which of the two is
likely to emerge in the long run as the dominant type? When it comes to combating this new phenomenon,
this is of essential importance. In a short final section, a number of central questions that should play a role
in concrete empirical research are presented.

Crimes designed to produce income that will help fund the cause are themost obvious criminal
activities used by terrorist organizations. Another category is what might be described as logistical support
crime, that is, crimethat facilitates easy and undetectable movement of personnel or money acrossnational
borders. A third category covers criminal activities designed to protect the terrorist organizations against
law enforcement and intelligence agencies –and these can include violence or corruption or a mix of both.
The fourthcategory of crimes encompasses those committed in direct support of specific operations or
attacks – and typically includes such acts as the theft of weaponsand explosives, illegal immigration that
facilitates undetected entry into thetarget country, and even drug trafficking if necessary to provide any
additionalfunds that are required.

Specialized criminal activities for profit are easy to implement, lucrative,and low risk, especially in
regions where a terrorist group can operate withminimum interference and maximum impunity. They
include looting of naturalresources (oil in Iraq and Syria) and cultural property, the trafficking of
drugs,cigarettes, weapons and other contraband, kidnapping for ransom, andextortion, as well as theft and
counterfeiting. More work needs to be done on thefungibility of these various revenue streams to assess
how badly terroristorganizations can be hurt by the international community targeting a particularrevenue
stream.

Many observers hold that terrorist groups and transnational criminal networks share many of the
same characteristics, methods and tactics. There are many examples cited to demonstrate these observations
are not coincidental, but indicative of a trend: a trend that is a growing threat to the security interests of
many nations. We propose that the intersection of criminal networks and terrorist organizations can be
broadly grouped into three categories – coexistence (they coincidentally occupy and operate in the same
geographic space at the same time), cooperation (they decide that their mutual interests are both served, or
at not least severely threatened, by temporarily working together) and convergence (each begins to engage
in behaviour(s) that is/are more commonly associated with the other). The activities of these types of
organizations in the Sahel region of Africa provide examples of all three categories of interactions. This
perceived threat has prompted action and policy choices by a number of actors in the sub-region. But this
assessment might not be accurate and may, in fact, be an attempt to force an extra-regional, inappropriate
paradigm upon a specific situation and set of circumstances where they do not apply. The terrorist-criminal
connection in the Sahel demonstrates, we believe, that there is a symbiotic relationship between these groups.
They occupy the same geographic space at the same time and it is not coincidental. Both groups operate best
in environments characterized by weak governance, and more often than not, no governance. Both maintain
their ranks by drawing on the same demographic – young and dissatisfied men. Both groups evidence
cooperation when it serves their individual organizational needs and purposes. But this is done only if a
determination is made that such cooperation does not result in increased scrutiny by the authorities.

Criminals will provide terrorist with whatever they require provided the price as right, and the
proliferation of kidnappings for ransom across the Sahel shows that that includes hostages. Terrorists, in turn,
are prepared to engage in, or at least tolerate, criminal activities if they serve their needs. This explains why
criminals kidnap hostages and terrorists negotiate their ransom.

Why Links or even Metamorphosis?

A number of political and economic developments have brought terrorism and organized crime into
each other’s territory. There are also a number of clear structural similarities that would appear to make
collaboration advantageous for both of them. In addition, both types of organizations can be expected to
attract the kind of personality types that reconcile the two types of criminal activities. We shall briefly
address these three complexes of factors.

Firstly there is the issue of globalisation. In this era of accelerated global interaction, transnational
organized crime and international terrorism are flourishing. There are thousands of criminal organizations
and hundreds of terrorist ones in the world. H. Hess, who did a great deal of research on terrorism in the past,
noted: “When I look back today at the time of the Red Brigades, the Baader-Meinhof Gang, the Weathermen,
the whole range of phenomena we studied as terrorism 20 years ago, I tend to become nostalgic (…). Most
terrorism was rather provincial” (Hess 2003: 345).P. Williams and R. Godson (2002: 311) writing about
organized crime today and comparing it with the situation in the past concluded that it “has reached levels in
the post-Cold War world that have surprised even close observers". The world has opened up, the borders
have faded or are no longer as well guarded, the market is globalized, financial and commercial mergers and
the deregulation of state intervention provide new opportunities, communication technology is presenting
unanticipated new technological possibilities and large-scale migration across the globe has created new
emigrant and refugee communities that can serve as recruitment bases and as hiding places (Makarenko
2001: 22-24).

The authors favouring the convergence thesis note a similarity between people who commit crimes
and people who throw bombs. Both have a common enemy, the state in general and its law enforcement
agencies in particular. Both types of criminals operate in secrecy, in the underworld, and they use the same
or similar infrastructures for their activities and the same networks of corruption and white-collar crime.
Both use the same type of tactics: they engage in cross-border smuggling, money laundering, counterfeiting,
kidnapping, extortion and various kinds of violence.

They cross paths, they help or submit to one another which makes them dependent on each other.
Transnational organized crime can use the power apparatus of political crime to create the social and
economic context that makes its profitable activities feasible. Terrorists, on the other hand, need funding to
push their own agendas. When terrorists groups are still small, they do not require many resources, but when
they grow into insurgent or guerrilla groups that aspire to control a larger region they have greater needs
(Naylor 2002).

The end of the Cold War, the existence of weak and even failed states, the rise of new surrogate or
shadow states – these are only a few of the political changes that offer new opportunities for underworld
organizations. The end of the Cold War meant in many cases an end to the sponsoring of terrorist
organizations by states from some actors in the two power blocks. Some organizations had no choice but to
look for new sources of funding, which, in many cases, meant either engaging in organized crime activities
themselves or in extorting money from criminal organizations and legitimate business via ‘revolutionary
taxation’ (Schmid, 1996:69)

Weak states characterized by limited state control easily fall prey to organized crime - Sicily and
Colombia are the standard examples - but they can also be targeted by terrorists. Failed states in Africa
(Sierra Leone, Somalia, Liberia) or Asia (Afghanistan) made it possible for organized crime to work with
national kleptocrats or local warlords who plundered their countries’ diamonds, gold, tropical timber, exotic
species of animals, etc. The distinction between terrorism and organized crime becomes obscured when
warlords utilize terrorist methods as well.

New economic formations are emerging which take little notice of national borders. They follow
their own logic of territorial development in the form of shadow states. A cultural anthropologist from Notre
Dame University (Indiana, USA), terms them “surrogate sovereigns” (Nordstrom, 2000) while an Italian
economist refers to them as “shell states”(Napoleoni, 2004).They are largely hidden from view and they
provide some of the world’s unstable economies and marginal political regions with arms, mercenaries and
luxury commodities. Figurations of this kind collaborate with ambitions political entrepreneurs who aspire
to both economic power and political control.

The structural similarities are striking. Organized crime researchers never tire of noting how few
classical large-scale pyramidal or bureaucratically organized groups there exist in today’s underworld.
Students of terrorism point out that cell structures and networks rather than big organisations are becoming
the rule. To a certain degree, both are right. Yet the terms organized crime and terrorism are each used to
refer to a range of very different criminal and political violence activities.

On the one hand, there are groups that organize crime by using private violence or the threat thereof;
their crime consists mainly of organized extortion. Their role is to provide a safe environment for signing
“business” contracts, to make sure that “agreements” are kept and that disputes between “business” partners
are settled. They perform this role in places where the state completely or partially fails to guarantee
contracts, such as Sicily (Gambetta 1993) or post-1989 Russia (Varese 2001, Volkov 2002). They are also
active in places where the state de facto withdraws its own influence (the sale of alcohol, drugs or
pornography, providing premises for prostitution or gambling). This kind of organized crime dominates all
the illegal and some of the legal activities in a certain territory, whether it is a country, a region or a
neighbourhood, and tends to establish a monopoly position (Schelling 1984). It may, as is the case with
certain activities in Russia, indeed take the form of a hierarchic organization.

On the other hand, there is a type of organized crime that is linked to the production, smuggling and
sale of illegal goods and services: trafficking in drugs or arms, smuggling of people, trafficking in human
beings, especially women, loan sharking, trading in exotic species of animals and tropical timber, dumping
toxic waste and so forth. Organizations that engage in these activities have no territorial aspirations and have
every reason to stay out of the way of the authorities and their law enforcement agencies. Commercial crime
organizations like this are far more numerous than the branches of the Mafia, Triads or Yakuza (which are
predominantly examples of the first category). However, they are not stable and bureaucratically organized
enterprises. Rather, they consist of networks of small and flexible groups of criminals or cells. This loose
form of illegal business is functional in the competitive and changeable world of illegality, making its
practitioners less visible to the law enforcement agencies (Reuter 1983).

Since there are so many categories of terrorist organizations, it is obviously hard to make any general
statements about them. Though it is certainly true that all terrorist groups tend to frighten people by using
extreme violence in their efforts to influence political developments, studies of concrete terrorist groups and
their activities tend to support the notion that the differences among such groups are greater than the
similarities (Cronin 2002). Terrorists aspire to left-wing or right-wing political aims, they champion the
cause of oppressed minorities, they are religiously motivated or pursue single issue goals ( e.g. the Animal
Liberation Front, campaigns to close abortion clinics).

It is highly probable that the type of terrorism determines in part how it is organized and whether or
not there is any collaboration with organized crime. The chance of cooperation with organized crime would
seem to be greater in the case of politically motivated terrorist organizations than, for example, with “crazy”
groups. There are terrorist cells which operate in complete independence, but there are also terrorists who
are (or were) supported or even totally organized by (foreign) governments. One hypothesis might be that
organized crime and terrorists work together more easily if and when they are supported, encouraged or
helped in some way by a government or parts of one, such as intelligence agencies.

Let us get back to the simple structure. One feature terrorist organizations have in common with
organized crime of the smuggling organization variety is that they do not always have stable and well
organized units; they are far more likely to consist of agglomerates of autonomous units. A.P. Schmid
(2004:194)) writes about the self-reliant lone wolf terrorist and cites V. Tishkov, who sees a paradigm for
the future in this type of “leaderless resistance” terrorist. The majority of terrorist groups never get past a
formative stage. If they grow into insurgent groups or guerrilla armies, that is when the need to become
better organized emerges.

There are bound to be differences in the forms of collaboration between these variants of organized
crime and terrorism. We can assume it is more profitable for terrorists to collaborate with production,
smuggling and sales organizations than with organized crime of the type that organizes the underworld as a
whole. And vice versa, it is more advantageous for organized crime to work with substantial organizations
that really exert political influence than with the lone fanatic who attacks unexpectedly and only generates
temporary panic.

To a certain extent, there is also a similarity in the type of persons involved in the two types of crime.
Both types of organizations tend to recruit the majority of their members from the same reservoir of
marginal segments of the population, which are subject to social, cultural or political frustration (strain
theory). Both types of organizations consist of people who are prepared to take risks, enjoy excitement and
thrills, and look down on the norms of regular society. There may be a division of labour here. Terrorist
groups might bring forth leaders and the criminal underworld may produce people with the necessary
operational and survival skills.

In addition, they have a major driving force in common, the yearning for power. In the first instance,
this does not seem to be such a serious motivating factor. The prevailing image of the terrorist is one of a
fanatic willing to sacrifice his or her life for a political ideal. If terrorists engage in suicide missions they
forfeit chances of exercising power in this world. The element of power does not often surface in the
literature on the root causes of terrorism. However, many terrorists, of course, go on living and do not risk
their own lives needlessly. Their personal profiles often reveal how much they enjoy fame and power
(Hoffman 2002: 169-180). It is not without reason that so many terrorist movements are named after their
charismatic leader. M. Ignatieff posed the question how terrorists account for the fact that in the name of
higher ideals, they violate fundamental human rights such as the right to life and the right to freedom. He
calls the ones whose true motivation is profit- and power- oriented “opportunistic nihilists” (Ignatieff,
2002).The life stories of prominent contemporary terrorists such as Osama Bin Laden or Ramzi Yousef
show that many of them belong to this category as do some of the leaders of the Colombian FARC, the IRA
and Abu Sayyaf (Reeve 1999).It is also striking that many present-day political actors in Lebanon who
began their careers as militia men have also profited from drug cultivation; it has certainly strengthened their
political positions (Ehrenfeld 1990).

The true value of the power theme has not yet been assessed in the field of organized crime either. In
examining why people join the Mafia, the first rationale given is usually the desire to get rich. Yet after
studying the testimonies of Italian turncoats, L. Paoli (2003: 151-154)concluded that the thirst for power,
especially local power, is probably always a more important driving force than the mere desire for wealth.
Organized crime leaders always claim to operate in secrecy and obey their own rule about keeping silent.
Yet a good number of autobiographical gangster memoirs reveal how much they too enjoy fame and power
(Firestone 1993: 197-220).In this sense, the personality of the gangster bears a number of similarities to that
of the “opportunistic nihilist” (Bovenkerk 2000).

Do such similarities make it easier to comprehend the connections and possible symbiosis? How can
the phenomenon of terrorism becoming organized crime and vice versa be explained? When do rebels turn
into felons? Or felons into rebels? These are once again questions to be addressed in detailed case studies.
All we can do at this point is to suggest a number of possibilities.

1. In organized crime and terrorist movements, the leaders are frequently very prominent, in fact the
groups are often named after their leader. What happens if the leader dies or goes to prison? Is it conceivable
that the terrorist organization degenerates into a gang of robbers? This seems to have been the case with the
group headed by the Uzbek rebel leader Juma Namangani who is assumed to have perished in 2001, after
which his gang went on randomly kidnapping for ransom.

2. What happens after insurgent terrorists lose the justification for their existence because the
authorities have settled the political issue they focused on? They might have become so accustomed to a
certain life style that they can not give it up. Perhaps they have taken too much of a liking to exerting the
kind of violence that is typical of terrorism. This appears to be one of the greatest obstacles facing
Colombian presidents seeking a peaceful solution to the problem of terrorism. Rebel armies like the FARC
and the ELN have built a life for themselves based on protection taxes from drug lords and kidnapping for
ransom. Some sections of them may even have developed into drug trafficking organizations themselves.

3. What happens to a Mafia family in dire straits because of the authorities’ success in combating
organized crime? Drug king Pablo Escobar had no qualms murdering politicians, judges, policemen and
even journalists or intimidating them with techniques from the terrorists’ repertoire. The Italian mafia has
also tried to intimidate the authorities and keep anti-mafia legislation from being passed by exploding car
bombs at public buildings like the Galeriadegli Uffizi in Florence. Some crime theorists suggest that creating
a general state of fear of terrorism promotes the advancement of organized crime. Plausible – but is this
really true?

4. There is also the possibility of widespread degeneration in the event of a lengthy armed conflict. A
civil war “may create a generation whose only skills, at what should be their peak productive years, are
military; they therefore turn easily to criminal activity for survival even after the conflict winds down”
(Naylor 2002: 82). If this is true, the future looks bleak for countries such as Liberia and Sierra Leone since
so many children have become accustomed to soldiering and looting.

The Emergence of Hybrid Organizations

Given the linkages and associated learning between criminals and terrorists, as well as the use of crime by
terrorists, some groups become hard to categorize using traditional typologies. In some instances, for
example, it is impossible to tell whether an entity is predominantly criminal or terrorist since it has major
attributes of both. Recognizing this, it is possible to identify the emergence of hybrid organizations that
share the attributes and objectives of both criminal and terrorist groups. The notion of hybrids is rooted in
biology and botany. The word is generally used to refer to “the offspring of two different species” or “the
genetic mixture or cross of two unrelated plants.” Here it refers to organizations combining an explicit
political agenda pursued through violence with a desire to make profits through illegal activities that go
beyond those needed to fund the cause. In cases such as this, the major players are hybrid organizations, part
criminal enterprise and part terrorist group. Examples of these hybrid organizations can be found in South
Asia and Latin-American, and among the terms that have been used to capture them are "commercial
insurgency,” “Dons of Terror,” and “For Profit Terrorism.” Some hybrids—such as D Company and the
Haqqani Network—are entirely comfortable with the mix and do a good job of sustaining and balancing
their different agendas. Others, such as Abu Sayyaf, however, are less comfortable and as a result, tend
either to shift the emphasis back to their original character or to oscillate uncertainly between its terrorist
and criminal identities. FARC has most of the qualities of a hybrid and although some would argue that it
has transformed from terrorist to criminal, it is not clear that the organization, as a whole, has disavowed its
ideological goals. Indeed, in an analysis done several years ago at the University of Pittsburgh it became
clear that FARC was far better connected than most criminal or terrorist organizations and that it could also
act as a bridge between the two worlds.

Transformation

The notion of transformation reflects the dynamism of political and social phenomena and the capacity of
organizations to morph. Transformation can occur in both directions either through the commercialization of
terrorist organizations or the politicization of criminal organizations. Fundamental to the process, however,
is a shift in the primary purpose of the organization—going from bringing about political change through
violence to using criminal activities for financial gain, or the opposite. In some cases, the transition can be
quick and relatively direct; in others, it may be slower, moving through the rise and decline of a hybrid
organization.

One possible cause of terrorist organizations becoming criminal organizations is disillusionment with the
progress of the political struggle. Another is that, over the long haul, a group becomes so enamoured of its
moneymaking activities that the political struggle becomes secondary, and ultimately subordinate. Profit
trumps politics, and political objectives are ultimately abandoned in favour of the pursuit of profit for its
own sake.

Change can also occur in the other direction. Perhaps the best example of this transformation is the hashish
trafficking group that became involved in the Madrid bombings of March 11, 2004 and actually financed the
operation. The drug traffickers purchased the explosives with a mix of money, Moroccan hashish and a
stolen car. Indeed, Spanish authorities concluded that the attacks cost somewhere between 43,000 and
54,000 Euros, all of which was provided by the traffickers. The terrorists had over 50,000 Euros in reserve,
as well as a stash of drugs worth over a million Euros. Although it appeared initially that the Madrid
bombings were an authentic case of close cooperation between criminal and terrorist organizations to carry
out terrorist attacks, in fact, something different occurred. The key was the radicalization of the leader of
the trafficking group, Jamal Ahmidan who was partially radicalized by the U.S. invasion of Iraq while in
prison in Morocco. When Ahmidan returned to Madrid and met Sarhane ben Abdelmajid Fakhet, a zealot
and wannabe terrorist, his radicalization was complete. In the event, Ahmidan and two Moroccan brothers
who were part of his trafficking organization were in the apartment in Leganes, and on April 3, 2004 blew
themselves up rather than surrender to the police. This was very uncharacteristic of drug traffickers who are
intent on making money, and suggests they had not only embraced a militant form of fundamentalism, but
also were willing to make the ultimate sacrifice for the cause.

Organised crime and violence and instability

Organised crime and illicit markets are commonly associated with violence and political instability. Already in the
early 20th century, social theorist Walter Benjamin had written that “the great criminal has aroused the secret
admiration of the public” not because of “his deed but […] [because of] the violence to which it bears
witness” (Benjamin, 1996: 239). This perception is being promoted by graphic news reporting on armed
conflicts and situations of chronic violence that are fuelled by proceeds from drug trafficking and other
illegal-criminal activities, such as those in Afghanistan, Colombia, Mexico, Central America and—in the
1990s and 2000s—Liberia and Sierra Leone. However, the available evidence does not bear out that
organised criminal activities, such as drug trafficking, oil theft and diamond or wildlife smuggling, are
necessarily— and equally—violent."
It is furthermore often assumed that organised crime is the midwife of political instability, social
disintegration and state fragility or failure. But, again, there is no conclusive evidence that this is actually
always and necessarily the case (Patrick, 2011). Hence, it appears wise to start this section by quoting R.T.
Naylor, a renowned expert on the matter: “perhaps the best answer to the broad question of whether illicit
markets are more prone to violence than licit ones is ‘maybe, but it depends’” (Naylor, 2009: 241).

Research on the relationship between organised crime and violence has focused on three distinct issues:

(2) criminal activities and organisations’ propensity for violence;

(3) the (potential) violence related to illicit markets; and
(4) the role of the state and political and social institutions in spurring and/or regulating violence
associated with criminal activities.

Regarding the propensity for violence of criminal activities and organisations, there are evidently
instances where organised criminal groups take recourse to violence and where competition between them
over illicit market shares turns violent, at times even extremely violent. However, this is not a general rule.
Research into illicit markets and diverse criminal activities has shown that “it is important to distinguish
between organized criminal activities in which violence or the threat of violence (coercion) is inherent, and
organized criminal activities in which violence is attendant or supportive but not essential to the activities
themselves” (Williams, 2009: 324).

Examples of inherently violent criminal activities include armed robbery, kidnapping and extortion.
However, when it comes to criminal organizations trafficking illicit commodities, violence is always latent
and often manifest, but it is not integral to the criminal activity. […] [Rather] criminal organizations operate
outside of the law and cannot resort to law to settle disputes with rivals, to deal with recalcitrant employees,
or to obtain redress for grievances. Instead they rely on the use and threat of violence for security (to protect
markets, routes, and other strategic assets associated with their trafficking activities), internal order (to
maintain internal discipline and punish those guilty of infractions) and power (to expand their market share)
(Williams, 2009: 324–5).

In some violent crime-permeated settings, the use of violence by criminal organisations includes targeting
family members of rival traffickers and other innocent civilians. It appears that these attacks and killings are
geared towards “demoralising” competing criminal groups, showing them that no one associated with them,
even if only literally “in passing”, is safe (Shirk & Wallman, 2015). In this regard, Guatemala and Mexico
are notorious for high rates of femicide or feminicide—the gender-based killing of women and girls (Carey
& Torres, 2010; Fregoso & Bejarano, 2010; Wright, 2011).

Thus, while violence is certainly a tool employed by criminal organisations to achieve their goals, it is not
necessarily their first preferred choice to act violently. As Phil Williams points out, " […] much of the time,
criminal organizations avoid violence against one another, and against the state. Cooperation among
criminal organizations is widespread, even though it typically remains fragile and can easily break down.
[…] In terms of the relationship with the state, criminal organizations prefer to operate under the radar but
if this is not possible then cooption of state authorities is generally preferred to confrontation. Similarly,
criminal organizations are able to maintain internal discipline primarily through trusted relationships,
albeit with a large dash of fear thrown in as insurance. The implication is that organized crime violence,
while certainly more than an anomaly, is not the norm (Williams, 2009: 325)"

With regard to illicit markets, the available evidence suggests they are not always and necessarily violent:
"The markets for illegal goods and services operate without the usual protection against fraud and violence
offered by the court system. The state instead of attempting to facilitate transactions, aims to disrupt them.
Contracts cannot be enforced through written documents and the legal system; agreements are made
hurriedly, sometimes in ambiguous code, and orally. Territories cannot be allocated through bidding for
desirable locations, since there is no enforceable ownership of property for these purposes. All these factors
can lead to violence for a variety of purposes. Yet illegality itself is insufficient to generate high levels of
violence in a market (Reuter, 2009: 275)."
When illicit markets—as well as licit ones in which criminal organisations invest and operate— turn violent,
this is often related to competition over territory, such as drug trafficking routes, high-value real estate and
particularly lucrative street corners for the retailing of drugs. This competition not only affects low-level,
local illicit markets but also occurs at the high level, where the, " […] groups are competing not for
territories directly but for the rights to pay those corrupt officials who control specific channels, such as
landing strips in a province in Guatemala. This is consistent with Schelling’s classic conjecture about the
U.S. Mafia, namely that organized crime was best thought of as the licensed collector of the rents associated
with the franchise held by the corrupt police departments in individual American cities (Reuter, 2009: 277)."

While upsurges in criminal violence can be explained in reference to these different types of competition,
they are also caused by tougher and more effective law enforcement. Using the current situation in Mexico
as an example, Reuter points out that, “as a result of tougher enforcement there has been considerable
turnover in the leadership of the principal drug trafficking groups; many leaders have been incarcerated […]
or killed in shoot-outs with the police and military” (Reuter, 2009: 278). As is known from other crime-
affected settings, such as from the city of Medellín, a Colombian drug-trafficking stronghold, after the
demobilisation of local paramilitary groups in the mid-2000s, “turn-over increases inter-gang conflict.
[Further], the dismissal of large numbers of corrupt officials [as in Mexico] creates uncertainty and hence
violence as traffickers search for new sources of protection” (ibid.: 278–9). Tougher law enforcement, which
not untypically involves employing the military to fight drug trafficking groups and other criminal
organisations, is also known to increase the levels of violence as the organisations “gear up” and strengthen
their firepower and capability to hit both law enforcers and rivals.

The state and political/social institutions play a crucial role in spurring and/or regulating violence
associated with criminal activities. The state—or parts of it—is by no means always an opponent of criminal
organisations, but may well be in cohorts with them and participate actively, as mentioned above in relation
to some African states, in the creation of “protection economies” (Elis & Shaw, 2015).

The degree to which the state offers protection to organised crime is a key variable: " Institutions of
protection, especially what we call state-sponsored protection rackets help explain varying levels of violence
within and across illicit markets. Where state-sponsored institutions of protection exist, levels of violence
will likely be low. Conversely, the breakdown of state-sponsored protection rackets, which may result from
well-meaning reforms intended to strengthen and improve law enforcement [and the rule of law], can
ironically lead to increases in violence (Snyder & Durán-Martínez, 2009: 254)."

The dynamics described above can be seen in the examples of Mexico after the transition from one-party
rule to a more pluralistic political system in 2000, Burma/Myanmar after 1990 and Iraq following the US-
led invasion in 2003. While Mexico witnessed a literal explosion of drug trafficking-related violence after its
democratic opening, leading the US government to consider it as being on its way to becoming a “failed
state”, in Myanmar, by contrast, “the construction of a state-sponsored protection racket after 1990 helped
quell a protracted civil war, resulting in a large reduction in violence” (Snyder & Durán-Martínez, 2009:
271). With regard to Iraq, “both Mexico and Iraq have a history of collusion between state elites and
organized crime; and in both cases that collusion has broken down” (Williams, 2009: 326). “The other
similarity in context is that both Iraq and Mexico suffer from high levels of corruption. Moreover, although
it is tempting to see corruption and violence as alternative strategies of criminal organizations – the
infamous choice between silver and lead – in both countries corruption and violence are mutually
reinforcing” (Williams, 2009: 329)

With significant context-specific variations, including with respect to the state’s strength and the particular
configuration of the existing protection economies, comparable pictures emerge in other cases of state-
and/or elite-sponsored protection rackets that are presently operational, such as in Nigeria (the world’s
single largest scenario for oil theft), Afghanistan (the world’s single largest opium/heroin producer) and
Guinea-Bissau (an important West African trans-shipment point for South American cocaine en route to
Europe).
Throughout most of the 2000s, the oil-bearing Niger Delta region of Nigeria witnessed significant levels of
violence, when so-called militant groups launched an effective attack on the vital oil infrastructure,
significantly reducing the country’s crude output and engaging the federal government military forces and
the oil majors in violent confrontation. This escalation of violence in the Delta was accompanied by a hike
in oil theft, locally known as “oil bunkering”, in which a broad range of militants, oil industry employees
and government officials, at both the local/regional and the federal level, have been involved. The crisis in
the Delta was ultimately quelled by a presidential amnesty for the Niger Delta militants, issued in 2009 by
the Yar’Adua administration, which re-established the terms of a federal state-sponsored protection racket
for the massive theft of crude oil (Schultze-Kraft, forthcoming).

In Afghanistan, " Despite growing evidence of the capture of “key pieces of the nascent state apparatus” by
drug-trafficking interests, the continuing weakness of the state itself, particularly beyond Kabul, negates its
classification as a traditional “narco-state”. Where Afghanistan is concerned, there is sufficient “narco”
but not enough state. That said, in accommodating the drugs trade and tolerating relationships between
major drug traffickers, key governors and deputy ministers, President Karzai has arguably created what
former Minister of the Interior Ali Jalali has referred to as a pax narcotica; an approach to governance that,
while helping to secure the president’s future, has done little for regional and international security
(Bewley-Taylor, 2013: 14)."

With respect to cocaine trafficking through Guinea-Bissau, Shaw observes that " Protection has been
supplied by a small network within the country’s elite. […] The ability of the elite network to offer
protection derives precisely from the fact that the key institutions of the state, including notably the justice
system, matter little, and are unable to mount a response. […] In Guinea-Bissau then, what could be termed
the “political economy of protection” – managed by an elite protection network – can be described as the
set of transactions entered into over-time by an elite groups of often competing individuals for the
purpose of ensuring the facilitation, sustainability and safety of a set of illicit activities (Shaw, 2015: 340–
1)."

It is important to note that, in cases of state- and/or elite-sponsored protection rackets and economies,
criminal violence is not absent. However, its levels are likely to be lower and it is more targeted than in
situations where the state confronts criminal organisations head-on. In this regard, it is crucial to recognise
that the states in question—be they Afghanistan, Guinea Bissau, Mexico, Myanmar or Nigeria—are
characterised by differing degrees of state fragility. These range from very high in Afghanistan, Guinea-
Bissau and Myanmar to relatively lower in Mexico, with Nigeria lying somewhere in between. Such states
do evidently not command a Weberian monopoly of the legitimate use of force but are characterised by
“oligopolies of coercion in peripheral areas” (Duncan, 2014: 19). Writing on two relatively developed
southern states, Colombia and Mexico, Gustavo Duncan argues that “in an oligopoly of coercion the state
does not disappear but instead participates in the exercise of local coercion […] oligopolies of coercion are
sub-national authoritarian systems that involve an additional distinction: the permanent and abundant role of
organised violence in the relations of the local power with both the local population and the state” (ibid.: 20).
However, in the case of significantly weaker states, such as Afghanistan and Guinea-Bissau, oligopolies
may also extend to the central level of government and power.

A Growing Threat to National and International Security

Using Iraq and Afghanistan as case studies, this article explores several critical questions. First, what is the
scope of the relationship among criminal organizations, terrorists, and insurgents? The analysis is drawn
from theoretical approaches but also relies on government studies and open source reports. Second, how has
the transitional period between post-conflict and reconstruction/nation-building created fertile ground for
strengthening the criminal–terrorist–insurgent continuum? This is a particularly important issue as the Bush
administration engages international organizations. Lastly, what can the United States and its Coalition allies
do to mitigate the security challenges presented by the criminal–terrorist–insurgent problem in the these two
countries? Transnational organized crime (TOC) poses a significant and growing threat to national and
international security, with dire implications for public safety, public health, democratic institutions, and
economic stability across the globe. Not only are criminal networks expanding, but they also are
diversifying their activities, resulting in the convergence of threats that were once distinct and today have
explosive and destabilizing effects.
Security has likely been the international community’s top concern in relation to organised crime in the past
two decades or longer. Following the end of the Cold War and in the context of accelerating globalisation,
Western governments and international organisations identified organised crime as a new threat to the
security of states and the international system, a driver of violent conflict in the developing world and in the
transition countries of the former Eastern bloc and a spoiler of peace. While mounting concern about the
insecurity generated by transnational organised crime was articulated in a series of key documents issued by
the UN, other international organisations and national governments (mostly in Europe and North America),
it proved challenging to integrate the issue into national and multilateral defence and security policy agendas
and peace operations. The default position has generally been one of tackling organised crime through
enhancing domestic law enforcement capabilities and increasing international cooperation in tracking and
disrupting illicit flows and seizing illegally acquired assets and “dirty money” (see Cockayne & Lupel,
2009). For a number of reasons that for lack of space cannot be discussed here, international peace
operations in settings as diverse as Afghanistan, Bosnia, Haiti, Iraq, Kosovo, Sierra Leone, etc. have on the
whole not been effective at reining in and reducing organised criminal activities.

In a manner similar to its reluctance to engage with violent conflict and security (on the terms of the security
community) in the 1990s and early 2000s (see, for instance, Duffield, 2001; Waddell, 2006), until recently
the international development community has not systematically responded to the problems that organised
crime throws up for development. As mentioned, this changed when, at the turn of the last decade, several
key international development agencies began to work on organised crime. A milestone in this regard is the
World Bank’s 2011 World Development Report, which refers to organised crime as one of several “new”
security threats in fragile and conflict-affected states. Developing the earlier debate about the nexus between
security and development, the report starts with the key observation that “insecurity not only remains, it has
become a primary development challenge of our time. One-and-a-half billion people live in areas affected by
fragility, conflict, or large-scale organized criminal violence” (World Bank, 2011: 1).

In this emerging conception, organised crime is thus framed as a driver of new forms of violent conflict that
undermine the chances for inclusive development: " The tendency to see violence as interstate warfare and
major civil war obscures the variety and prevalence of organized violence – and underestimates its impact
on people’s lives. The organised violence that disrupts governance and compromises development also
includes local violence involving militias or between ethnic groups, gang violence, local resource-related
violence and violence linked to trafficking (particularly drug trafficking). […] This violence is often
recurrent, with many countries now experiencing repeated cycles of civil conflict and criminal violence
(World Bank, 2011: 53)."

Moreover, the boundaries between different types of violence and between the actors employing it are
becoming increasingly blurred. For instance, in the 2000s, the militant groups in the Niger Delta of Nigeria
were both laying siege to the country’s vital oil infrastructure and the operations of the transnational oil
majors in the name of “resource control”, and very actively engaging in association with regional and
federal political and military elites in the theft of crude oil on an industrial scale (Schultze-Kraft,
forthcoming; Watts, 2007).

However, it is important to realise that organised crime’s negative impact on development in terms of
(in)security is not necessarily and mostly a result of criminal violence. As discussed above, there is no
strong correlation between organised crime and violence. Organised criminal activities may, at times, lead to
high or even extreme levels of violence. But there is equally sufficient evidence showing that illegal markets
can be relatively peaceful depending, for instance, on whether they are “closed” or “open”, whether they
involve the control of “territory” or not or whether they are “co-managed” or not between criminal
organisations and state authorities. Examples of the former scenario include contemporary El Salvador,
Honduras and Mexico—that is, key Latin American drug trafficking hubs on the route to the US. The latter
scenario can be found in, for instance, Ghana and Guinea-Bissau—key West African drug trafficking hubs
on the route to Europe.

Where criminal activities and illegal markets are non-violent, their negative impact on development does not
result from the violence they spawn but is transmitted through other vectors that produce insecurity. The
crucial question here is thus whether we are talking about the security of the state or rather about human and
citizen security in developing countries where organised crime has gained a strong foothold (see Luckham,
2015). In other words, is organised crime a development problem because it generates insecurity for states or
because organised criminal activities and groups undermine human and citizen security? The available
evidence from across Latin America, sub-Saharan Africa and South Asia indicates that organised criminal
activities throw up both types of problems for development. Depending on the case, it may be the security of
the state and the stability of a country’s political institutions that are threatened, or it may be the security of
citizens and the full enjoyment of their fundamental rights that are under threat from organised crime. In
reality, both scenarios can and do overlap in practice.

Penetration of State Institutions, Corruption, and Threats to Governance.

While crucial, the political dimension of organised crime and its impact on the state, political institutions
and governance in developing countries has long not received the attention it warrants. As discussed above,
criminal organisations have typically been portrayed as somehow detached and alienated from the state or, at
the most, representing some kind of parallel state or force that seeks to “capture” it. In this conception,
organized crime is framed as deepening state fragility by further undermining already weak state capacity,
authority and legitimacy as criminal groups resort to violence to defend their interests, distort markets and
siphon off scarce resources. In this vein, fragile and conflict-affected states are seen as convenient theatres
of operation for transnational criminal groups and networks, such as Latin American drug trafficking
organizations in West Africa. The affected countries are thus stylized as vulnerable places located on the
large trans-continental smuggling and trafficking routes. These are essentially controlled by external
criminal actors who make use of the opportunities ungoverned spaces and existing local corruption rings
among the government and security forces offer.

Developing countries with weak rule of law can be particularly susceptible to TOC penetration. TOC
penetration of states is deepening, leading to co-option in a few cases and further weakening of governance
in many others. The apparent growing nexus in some states among TOC groups and elements of
government—including intelligence services—and high-level business figures represents a significant threat
to economic growth and democratic institutions. In countries with weak governance, there are corrupt
officials who turn a blind eye to TOC activity. TOC networks insinuate themselves into the political process
in a variety of ways. This is often accomplished through direct bribery (but also by having members run for
office); setting up shadow economies; infiltrating financial and security sectors through coercion or
corruption; and positioning themselves as alternate providers of governance, security, services, and
livelihoods. As they expand, TOC networks may threaten stability and undermine free markets as they build
alliances with political leaders, financial institutions, law enforcement, foreign intelligence, and security
agencies. TOC penetration of governments is exacerbating corruption and undermining governance, rule of
law, judicial systems, free press, democratic institution-building, and transparency. Further, events in
Somalia have shown how criminal control of territory and piracy ransoms generate significant sums of illicit
revenue and promote the spread of government instability.

However, the relationship between state fragility and organised crime is more complex than is commonly
portrayed. For instance, too little attention has been paid to the intricate ways in which organised criminal
groups and networks have sought to influence the outcomes of electoral contests at the municipal and even
the national level in developing countries. Their methods include coercion, but importantly also the
establishment of alliances with political parties, and the injection of funds into the electoral campaigns of
“willing” politicians. For these processes to work, it takes two to tango, as it were: organised crime is acting
in concert with political and other elite sectors in the context of political systems and governance structures
often characterised by clientelism, patronage, informality, corruption and illegality. This analysis poses a
number of intricate challenges for current conceptions of state fragility and development in fragile and
conflict or violence-affected settings (see, for instance, Miraglia et al., 2012).

According to a recent study by the Centre on International Cooperation at New York University " […]
organized crime poses enormous governance challenges for developing countries. All of the countries
[Nepal, Ghana, Mozambique, Sierra Leone, Guyana and Jamaica] studied for this project (except Nepal)
are formal multi-party democracies. However, in most of the cases (including Nepal), formal institutions are
underpinned by extensive informal systems sustaining patronage and corruption, and a political economy
providing limited services and protection for citizens. In each of the case studies, organised crime takes
advantage of systemic weaknesses, for example, through corruption of the electoral, legislative, and public
procurement processes, and corruption of local administrations. Coercion of politicians and public service
officials by organized criminals also plays into this situation, as does the reverse side with political actors
taking advantage of organized crime for political gain. In most cases, a weak or politicized civil society and
media, or an academia with limited voice, provide limited checks on government complicity with organized
crime (Kavanagh, 2013: 17)."

In the era of globalisation, large illicit flows of (illicit) goods and money can therefore have very significant
effects on the political economies of developing countries. “Criminal groups are generally more nimble
than government regulators in exploiting new markets, but in African cases the growth of organized crime is
not primarily because of deficiencies in regulation so much as in the willingness of politicians to envisage
relationships with professional criminals” (Ellis & Shaw, 2015: 515)

Once large-scale drug markets, for instance, have become established, such as in West Africa in the past
decade, "Political marketplaces […] are prone to undergo significant change. Group loyalties that hitherto
were negotiated within, and structured by, patronage and clientelistic relationships of a ‘traditional’ kind,
that is, without significant external influences, become vulnerable to breaking up or being transformed. […]
New relationships of loyalty and patronage emerge that are likely to involve a larger number of groups,
including subaltern ones. In extreme cases, such as in Guinea-Bissau, this can result in the staging of coups
by factions of the military and political elites that compete over drug trafficking rents, as well as in the
capture of the entire state by drug-trafficking interests (Schultze-Kraft, 2014: 18–19)."

There can be other, though in the longer term not less pernicious, variations of these dynamics: “Importantly,
elite bargains that underpin existing political settlements and provide a degree of stability can be shaken up
when, for instance, one powerful faction becomes involved in an illicit business and switches alliances. […]
Other powerful groups which are left out of these criminal bargains will have strong incentives to follow
suit and establish their own alliances with traffickers [or other criminal entrepreneurs] so as not to end up
in a disadvantaged position vis- à-vis their competitors. A vicious circle can result in which progressively
more groups that hold sway over their country’s political and economic affairs are drawn into the
trafficking networks and become beholden to criminal interests" (Schultze-Kraft, 2014: 19).

In sum, from a political and governance perspective, organised crime represents something of an anti-thesis
to inclusive and sustainable development. Rather than “development in reverse”, as has been said about
violent conflict, organised crime is non-development, as it undermines and/or transforms political
institutions and governance structures while at the same time creating its own rules and modes of
governance. These are, however, essentially non-democratic, non-accountable, non-transparent and
exclusionary; and, depending on the involved illicit markets and the particular configuration of the
associated protection economies, have a propensity to be upheld by the illegitimate use of coercion.

Threats to the Economy, Competitiveness, and Strategic Markets.

TOC threatens any states economic interests and can cause significant damage to the world financial system
through its subversion, exploitation, and distortion of legitimate markets and economic activity. U.S.
business leaders worry that U.S. firms are being put at a competitive disadvantage by TOC and corruption,
particularly in emerging markets where many perceive that rule of law is less reliable. The World Bank
estimates about $1 trillion is spent each year to bribe public officials, causing an array of economic
distortions and damage to legitimate economic activity. The price of doing business in countries affected by
TOC is also rising as companies budget for additional security costs, adversely impacting foreign direct
investment in many parts of the world. TOC activities can lead to disruption of the global supply chain,
which in turn diminishes economic competitiveness and impacts the ability of U.S. industry and
transportation sectors to be resilient in the face of such disruption. Further, transnational criminal
organizations, leveraging their relationships with state-owned entities, industries, or state-allied actors, could
gain influence over key commodities markets such as gas, oil, aluminum, and precious metals, along with
potential exploitation of the transportation sector.
Organised criminal activities as diverse as extortion, drug trafficking, migrant smuggling, oil theft on an
industrial scale, illegal gold and diamond mining, cybercrime and counterfeiting, among many other “lines
of criminal business”, generate huge amounts of money every year. Such activities are essentially geared at
stealing natural, intellectual and other resources, depriving states of very large amounts of revenue and
serving as “massive drains on the productivity of nations, for the potential for equitable and sustainable
economic growth, and for the capacity for governments to provide services to their citizens” (Global
Initiative/SWP, 2014: 4). This lost revenue comes in the guise of taxes and other duties that are not accrued
by states and massive illicit financial flows out of developing countries, which in 2015 surpassed the $1
trillion mark, to offshore tax havens or bank accounts in industrialised countries in Europe, the Americas
and Asia (Kar & Spanjers, 2015; OECD, 2014).

Corruption rings involving public officials, sometimes at the highest level of the government and state, often
play an important role in the siphoning of public revenue. In this regard, Margaret Beare observes that," It is
essential to appreciate the interface between the legitimate and illegitimate operations within criminal
enterprises. This interface is to varying degrees facilitated by corruption. However, the one important
dimension in which the processes employed by different organized criminals vary is their ability to garner
support and assistance via corruption. […] The ability to corrupt enables one to buy protection from
enforcement, eliminate competition and therefore amass capital. […] The greater the ability to corrupt, the
greater the ability to remain invisible, or to be seen to be legitimate – unless the entire system is blatantly
corrupt and has redefined pay-offs and the like as publicly recognized business procedures. The problem
arises that at the most sophisticated integrated level, the ability to corrupt enables one to control the
definition of what is or is not defined as corruption (Beare, 1997: 158)." It is under such conditions that the
conventional distinction between corruption and organised crime risks becoming meaningless. As Ellis and
Shaw observe with regard to Africa, “corruption is […] the objective of the most serious organized criminal
groups in Africa, not a facilitating activity as it is often held to be in the literature on organized crime
elsewhere” (Ellis & Shaw, 2015: 510)

The estimated value of this global illegal-criminal economy is truly startling. According to the Global
Initiative, organised criminal activities and networks are " […] stealing the future: it is estimated that one
trillion dollars is diverted into the illicit economy by organized crime. This siphoning of funds away from
the legitimate economy and licit actors has considerable impact on the viability of sustainable markets […].
[…] With growing illicit activity and the creation of protection economies, the illicit economy can crowd out
the legitimate economy. By flooding [licit] markets with illicit capital, by protectionism, price fixing and
rent seeking, criminal groups push out genuine economic activity and distort markets. […] Through the
provision of social and economic goods, [they] siphon social capital and reduce trust in the state (Global
Initiative, 2014: 5)"

However, it would be mistaken to assume that criminal activities and protection economies do not create
livelihoods and generally reduce economic growth (Dawid et al., 2002). The point is that they do contribute
to income and livelihood generation but at the same time they destroy and/or undercut licit livelihoods that
would be sustainable and development-enhancing in the longer term (Global Initiative/SWP, 2014;
Schultze-Kraft, 2014).

In this context, it cannot be emphasised enough that poor and vulnerable people and communities are not
among the “winners” of these criminal and illicit economies. On the contrary, they constitute the groups that
are most exposed, even if not always in direct ways, to market distortions as well as extortion, intimidation
and violence wielded by drug trafficking outfits, insurgent and terrorist organisations and corrupt political
and economic elites. At the same time, poor and vulnerable people and communities—such as coca and
poppy growers in the Andean region of South America and Afghanistan, respectively, or artisanal oil thieves
in the Niger Delta of Nigeria and illegal timber loggers in Nepal—are first in line to be “criminalised” by
governments and national and/or international law, making them subject to harsh law enforcement
interventions. Because of the lack of or suboptimal and non-viable economic alternatives, this can—and in
fact does—result in endangering the livelihoods of these communities.
However, it is also pertinent to note, in the words of drug policy expert David Bewley-Taylor, that," In
Afghanistan, as in other fragile states (drug producing or otherwise), the “legal” economy is pervaded by
criminal behaviour, with actors floating between worlds. Within such an environment, most Afghan farmers
engaged in poppy cultivation are doing so as the result of a complex mix of drivers and thus should not
simply be classified as rational economic actors merely seeking maximum returns. Nonetheless, a relatively
low “risk premium” certainly incentivises involvement in the illicit opium economy, for both producers and
traffickers (Bewley-Taylor, 2013: 7)"

Expansion of Drug Trafficking.

Despite demonstrable counterdrug successes in recent years, particularly against the cocaine trade, illicit
drugs remain a serious threat to the health, safety, security, and financial well-being of Americans. The
demand for illicit drugs, both in the United States and abroad, fuels the power, impunity, and violence of
criminal organizations around the globe. Mexican DTOs are escalating their violence to consolidate their
market share within the Western Hemisphere, protect their operations in Mexico, and expand their reach into
the United States. In West Africa, Latin American cartels are exploiting local criminal organizations to
move cocaine to Western Europe and the Middle East. There have also been instances of Afghan DTOs
operating with those in West Africa to smuggle heroin to Europe and the United States. Many of the well-
established organized criminal groups that had not been involved in drug trafficking—including those in
Russia, China, Italy, and the Balkans—are now establishing ties to drug producers to develop their own
distribution networks and markets. The expansion of drug trafficking is often accompanied by dramatic
increases in local crime and corruption, as the United Nations has detected in regions such as West Africa
and Central America.

Human Smuggling.

Human smuggling is the facilitation, transportation, attempted transportation, or illegal entry of a person or
persons across an international border, in violation of one or more countries’ laws, either clandestinely or
through deception, whether with the use of fraudulent documents or through the evasion of legitimate border
controls. It is a criminal commercial transaction between willing parties who go their separate ways once
they have procured illegal entry into a country. The vast majority of people who are assisted in illegally
entering the United States and other countries are smuggled, rather than trafficked. International human
smuggling networks are linked to other transnational crimes including drug trafficking and the corruption of
government officials. They can move criminals, fugitives, terrorists, and trafficking victims, as well as
economic migrants. They undermine the sovereignty of nations and often endanger the lives of those being
smuggled. In its 2010 report The Globalization of Crime: A Transnational Organized Crime Threat
Assessment, the United Nations Office on Drugs and Crime (UNODC) estimated that the smuggling of
persons from Latin America to the United States generated approximately $6.6 billion annually in illicit
proceeds for human smuggling networks.

Trafficking in Persons.

Trafficking in Persons (TIP), or human trafficking, refers to activities involved when one person obtains or
holds another person in compelled service, such as involuntary servitude, slavery, debt bondage, and forced
labor. TIP specifically targets the trafficked person as an object of criminal exploitation—often for labor
exploitation or sexual exploitation purposes—and trafficking victims are frequently physically and
emotionally abused. Although TIP is generally thought of as an international crime that involves the
crossing of borders, TIP victims can also be trafficked within their own countries. Traffickers can move
victims between locations within the same country and often sell them to other trafficking organizations.

Weapons Trafficking.

Criminal networks and illicit arms dealers also play important roles in the black markets from which
terrorists and drug traffickers procure some of their weapons. As detailed in the 2010 UNODC report The
Globalization of Crime, “The value of the documented global authorized trade in firearms has been
estimated at approximately $1.58 billion in 2006, with unrecorded but licit transactions making up another
$100 million or so. The most commonly cited estimate for the size of the illicit market is 10% - 20% of the
licit market.” According to the head of UNODC, these “illicit arms fuel the violence that undermines
security, development and justice” worldwide. U.S. Federal law enforcement agencies have intercepted large
numbers of weapons or related items being smuggled to China, Russia, Mexico, the Philippines, Somalia,
Turkmenistan, and Yemen in the last year alone.

Intellectual Property Theft.

TOC networks are engaged in the theft of critical U.S. intellectual property, including through intrusions
into corporate and proprietary computer networks. Theft of intellectual property ranges from movies, music,
and video games to imitations of popular and trusted brand names, to proprietary designs of high-tech
devices and manufacturing processes. This intellectual property theft causes significant business losses,
erodes U.S. competitiveness in the world marketplace, and in many cases threatens public health and safety.
Between FY 2003 and FY 2010, the yearly domestic value of customs seizures at U.S. port and mail
facilities related to intellectual property right (IPR) violations leaped from $94 million to $188 million.
Products originating in China accounted for 66% of these IPR seizures in FY 2010.

Cybercrime.

TOC networks are increasingly involved in cybercrime, which costs consumers billions of dollars annually,
threatens sensitive corporate and government computer networks, and undermines worldwide confidence in
the international financial system. Through cybercrime, transnational criminal organizations pose a
significant threat to financial and trust systems—banking, stock markets, e-currency, and value and credit
card services—on which the world economy depends. For example, some estimates indicate that online
frauds perpetrated by Central European cybercrime networks have defrauded U.S. citizens or entities of
approximately $1 billion in a single year. According to the U.S. Secret Service, which investigates
cybercrimes through its 31 Electronic Crimes Task Forces, financial crimes facilitated by anonymous online
criminal fora result in billions of dollars in losses to the Nation’s financial infrastructure. The National
Cyber Investigative Joint Task Force, led by the Federal Bureau of Investigation (FBI), functions as a
domestic focal point for 18 federal departments or agencies to coordinate, integrate, and share information
related to cyber threat investigations, as well as make the Internet safer by pursuing terrorists, spies, and
criminals who seek to exploit U.S. systems. Pervasive criminal activity in cyberspace not only directly
affects its victims, but can imperil citizens’ and businesses’ faith in these digital systems, which are critical
to our society and economy. Computers and the Internet play a role in most transnational crimes today,
either as the target or the weapon used in the crime. The use of the Internet, personal computers, and mobile
devices all create a trail of digital evidence. Often the proper investigation of this evidence trail requires
highly trained personnel. Crimes can occur more quickly, but investigations proceed more slowly due to the
critical shortage of investigators with the knowledge and expertise to analyze ever increasing amounts of
potential digital evidence.

Socio-cultural consequences of organized crime

The socio-cultural dimension is perhaps the aspect of the relationship between organised crime and
development that so far has received the least attention in the academic and policy literatures. While the
evidence base needs to be broadened, it seems undeniable that, for subaltern and underprivileged groups,
particularly young people, in many development settings there is a social attractiveness to being part of a
criminal organisation and engaging in illicit and/or illegal activities. Increasingly, this includes young
women, for whom “successful female criminal bosses have become ‘role models’” (Siegel, 2014: 62).
Living and working in the “underworld” provides social status where other legitimate avenues for social
advancement and mobility either do not exist or are very hard to break into. As “crime has become more and
more embedded in social life” (ibid.: 63), the lure of quick and easy money is omnipresent and both young
men and women are vulnerable to giving in to it. Consider, for instance, the young captains of the go-fast
boats that are setting out from different locations on Colombia’s Pacific coast to destinations as far away as
Central America or even China. If they manage to avoid getting caught by the US Coast Guard or the navies
of other countries and if they do not sink on the journey or are killed, they can be pretty certain that back at
home they will receive a hero’s welcome and a payment for their services that they would never have been
able to obtain in a lifetime’s work.

Out of this grow sub-cultures, which, depending on the circumstances, may become the “official” culture in
a given locality and among large groups of young people living in peri-urban and destitute areas of large
cities. Consider, for instance, the musical subculture of the narcocorridos in Mexico, the symbolism of
tattoos among street gang (mara) members in Central America and the so-called cult groups and fraternities
in Lagos and the large cities of the Niger Delta in Nigeria (Bargent, 2014; Eberlein, 2006; Simonett, 2004).
In this regard, it is important to note that women do not typically figure in larger numbers in the hierarchies
of organised criminal groups and gangs. While recent research has refuted the notion that women have
traditionally been subordinate part players in a male-dominated system of organised criminality (Arsovska
& Allum, 2014), they, as mentioned above, are nonetheless at risk of becoming victims of gender-based acts
of criminal violence and other abuse. Further, participation in illicit or illegal activities is not always
perceived to be outside of, or in contravention with, social norms. This is the case in, for instance, West
Africa, where drug trafficking is not seen as a crime but rather as a “decent” way to earn a living (Schultze-
Kraft, 2014). The same can be said about other regions, such as the Andes in South America, and
Afghanistan, where illegal activities are tolerated or even actively supported by sectors of the population.
This may be either because there is very little trust in the—fragile—state and its adherence to the law
(reflected in repressive state practices and serious human rights violations) or because there are no viable
alternative and licit economic opportunities, particularly for the poorest households (Mansfield, 1999).

Yet this social tolerance of illicit or outright criminal activities and behaviours comes at a cost, as social
cohesion is affected, generational conflicts erupt between elders and youths, conflicts between and within
communities are spurred, family and clan relationships are transformed and public health problems are
aggravated. According to a recent study, " […] not only do criminal networks garner billion dollar profits
from dealing directly in the counterfeiting and trafficking of medical and pharmaceutical goods […] but
also a number of the most virulent organized crime practices: drug trafficking and human trafficking,
contribute significantly to denigrating public health. For example, injecting drug use is responsible for one
in ten of every new HIV infection globally, and in some countries in Eastern Europe and Central Asia this
runs as high as 80% (Global Initiative/SWP, 2014: 4)."

Further, in certain—likely extreme—circumstances, social tolerance of illicit and criminal activities and
behaviours can be reflected in the emergence of what has been described as a “culture of lawlessness”.
According to Williams, “Iraq after the collapse of the Ba’athist regime was characterized by anomie – a
behavioural sink, a degeneration of rules and norms and the emergence of forms of behaviour unconstrained
by standard notions of what is or is not acceptable. […] the decline of behavioural norms and standards
feeds into the spread of crime and violence” (2009: 327).

Organised crime and development

The analysis presented in the previous section strongly suggests organised crime and the myriad unlawful
activities and businesses it spawns in national and sub-national jurisdictions as well as transnationally pose
serious—potential and real—challenges for development. Depending on the case, the members of, and
participants in, criminal groups and networks, respectively, include professional criminals but also a broad
range of other state and non-state actors, such as insurgents, warlords, businesspeople, lawyers, politicians,
military and police officers and civil servants.

The activities and strategies of organised crime groups and networks and their organisational forms are
multiple, adaptable and dynamic. They may involve the threat and use of violence but also varying types of
non-violent interactions and transactions, such as corruption and bargaining and pact-making between a
range of official and unofficial power-holders and their constituencies. The organisation of criminal
activities and participation in them is motivated by the active quest for economic and other material gains by
illegal means but also by economic, institutional and other opportunity structures, strategic choice, social
and political relationships and the socio-cultural environment. The impact of organised criminal activities on
licit markets, societies and states, particularly fragile ones, is (potentially) far-reaching, corrosive and
destructive: economic, political and social institutions are undermined and/or transformed and reconfigured,
accountability and democratic processes are hollowed out, vast amounts of public revenue are lost and stolen,
social cohesion is fractured and the security of citizens and states is endangered.

Yet it was not until relatively recently that a small but influential group of bilateral and multilateral donor
agencies, such as the UK’s Department for International Development (DFID), Germany’s Gesellschaft für
internationale Zusammenarbeit (GIZ), the Organisation for Economic Development and Co-operation
(OECD) and the World Bank, began to engage with the issue in more systematic fashion. This engagement
has been spurred by mounting concerns that organised crime—just like armed conflict and insecurity—is
holding back and/or undermining inclusive and sustainable development, particularly in the world’s poorest
countries and most fragile states. According to the Global Initiative against Transnational Organized Crime,
a global network of law enforcement, governance and development practitioners dedicated to seeking new
and innovative strategies and responses to organised crime,

The international community has become increasingly aware of the extent to which organised crime serves
as a spoiler of sustainable development. This realisation has been enshrined in a number of seminal reports.
In 2005, the report of the UN Secretary-General, “In Larger Freedom,” which identified the challenges
preventing the achievement of the Millennium Development Goals (MDGs), highlighted organised crime as
one of the principle threats to peace and security in the 21st century. The 2010 “Keeping the Promise” report
of the Secretary-General recognised that in order to achieve the MDGs, there would need to be capacity to
respond specifically to organised crime. The [World Bank] World Development Report 2011 concluded that
both conflict and organised crime have the same detrimental effect on development, resulting in 20% less
development performance. As such, combating organised crime and promoting greater economic and social
resilience to its most deleterious impacts has become an integral part of the 2012 “Action Agenda” of the
Secretary-General, as a priority for achieving a stable world (Global Initiative, 2015: 3).

This incorporation of organised crime into international development discourse and practice acquired a new
quality with the adoption, in 2015, of the Sustainable Development Goals (SDGs) (UN General Assembly,
2015). Although organised crime writ large is not a central element in the 2030 Agenda for Sustainable
Development, “illicit financial and arms flows”, “the recovery and return of stolen assets”, the “combat of
all forms of organized crime” and the reduction of “corruption and bribery” are all explicitly mentioned in
Goal 16 and Targets 16.4 and 16.5. As the Global Initiative observes, "While organised crime’s importance
is recognised, [its impact on development is] extensive and diverse [and needs to be clearly acknowledged
as such]. Organised crime cannot be viewed as a separate development challenge to be addressed in
isolation. Rather, an effective response calls for the recognition that organised crime is an intrinsic element
to a large number development challenges, and must be interwoven throughout broader development
response frameworks (Global Initiative, 2015: 4)."

While this is true, it is equally important to recognise that we have still limited knowledge on the specific
negative impacts organised crime has on development—that is, through which mechanisms and processes it
becomes “a spoiler to development” (Global Initiative, 2014: 1)— and how to measure this impact.

Financial System and Strategic Markets and Transnational Organized Crime

Transnational criminals are now more entrepreneurial and sophisticated, and their growing infiltration of
licit commerce and economic activity fundamentally threatens the free markets and financial systems that
are critical to the stability and efficiency of the global economy. TOC threatens free markets because it
disregards the laws and norms that legitimate businesses respect, thereby reaping an unfair competitive
advantage. By eroding market integrity, quality, and competitiveness and using financial systems to move,
conceal, and increase illicit funds, transnational criminals exploit and undermine not only the interests of the
nation but also those of all countries promoting the rule of law.

By carefully following strategic and emerging markets for indicators of criminal interest, the United States
can detect, disrupt, and reduce the economic power of TOC. To do so, the United States will work with our
international partners to deter or sever crime-state alliances, raise awareness to alert businesses that may be
unwitting facilitators for criminal enterprises, and continue to develop appropriate safeguards to protect the
legitimate flow of trade and investment. By targeting criminal assets and opportunities, the United States
and its allies can markedly reduce the profitability, growth, and evolution of TOC networks.

The Critical Role of Facilitators.

Connecting these converging threats are “facilitators,” semi- legitimate players such as accountants,
attorneys, notaries, bankers, and real estate brokers, who cross both the licit and illicit worlds and provide
services to legitimate customers, criminals, and terrorists alike. The range of licit-illicit relationships is
broad. At one end, criminals draw on the public reputations of licit actors to maintain facades of propriety
for their operations. At the other end are “specialists” with skills or resources who have been completely
subsumed into the criminal networks. For example, TOC networks rely on industry experts, both witting and
unwitting, to facilitate corrupt transactions and to create the necessary infrastructure to pursue their illicit
schemes, such as creating shell corporations, opening offshore bank accounts in the shell corporation’s
name, and creating front businesses for their illegal activity and money laundering. Business owners or
bankers are enlisted to launder money, and employees of legitimate companies are used to conceal
smuggling operations. Human smugglers, human traffickers, arms traffickers, drug traffickers, terrorists, and
other criminals depend on secure transportation networks and safe locations from which to stage smuggling
activity or to store bulk cash or narcotics for transport. They also depend on fraudulently created or
fraudulently obtained documents, such as passports and visas, to move themselves or their clients into the
United States and illegally reside here. Transnational criminal networks such as organized crime groups,
drug traffickers, and weapons dealers at times share convergence points—places, businesses, or people—to
“launder” or convert their illicit profits into legitimate funds. Many of these disparate networks also appear
to use the same casinos, financial intermediaries, and front companies to plan arms and narcotics deals
because they view them as safe intermediaries for doing business. Cash-intensive and high-volume
businesses such as casinos are especially attractive, particularly those in jurisdictions that lack the political
will and oversight to regulate casino operations or fail to perform due diligence on casino licensees. Illicit
networks similarly abuse some of the same financial intermediaries and front companies in regions where
government or law enforcement corruption is prevalent, with officials receiving either revenues from the
criminal businesses or ownership stakes in the legitimate-appearing commercial entity.

If one had to speculate which of the two types of underground organizations is likely to become
dominant and outlasting the other it would be our educated guess that it is less probable that mafia dons will
convert to terrorism than that terrorists will settle for the better life of real criminals. When it comes to
exposure to temptation, in the long run greed tends to be stronger than ideology. The newly emerging
hybrid group of “organized criminal terrorists” is likely to be a group of individuals that sponsors, supports,
and/or actively engages in terrorist activity in order to promote their own personal interests, striving to
acquire more power and wealth. Organized crime, in this perspective, would be the outcome of any merger
that might take place. Whether this speculative thesis is born out by present and future developments ought
to be subject of investigation.

The Mogilevich Organization

Semion Mogilevich is wanted by the United States for fraud, racketeering, and money laundering and was
recently added to the FBI’s Ten Most Wanted fugitives list. Mogilevich and several members of his criminal
organization were charged in 2003 in the Eastern District of Pennsylvania in a 45-count racketeering
indictment with involvement in a sophisticated securities fraud and money-laundering scheme, in which they
allegedly used a Pennsylvania company, YBM Magnex, to defraud investors of more than $150 million.
Even after that indictment—and being placed on the FBI’s Ten Most Wanted list—Mogilevich has
continued to expand his criminal empire. Mogilevich was arrested by Russian police on tax charges in
January 2008 and was released pending trial in July 2009. Other members of his organization remain at large.

State Failure and Organized Crime

In the National Security Strategy, George W. Bush draws attention to failed states as anew security threat,
and ye the dynamics of such failure are poorly understood. States fail when they lose control over the
political and economic life of the country; they can no longer provide basic human security to their citizens
and become instruments of personal malignant interests. The image of a failed state is familiar: it is the
image of Afghanistan, Sierra Leone, and Somalia. The dangers of failed states are also familiar: they can be
hotbeds of conflict, providing sanctuary to terrorist and insurgency groups whose presence can have long
reaching security effects into neighbouring countries and beyond. Less familiar is the distinction of the
causes of such failure from the symptoms. Although there are many structural or root causes of weak and
failing states, from the perspective of prevention in the short-term, it is necessary to focus on the proximate
causes that trigger and intensify the process of disintegration. The focus of this study is on one such cause:
organized crime. The drug trade in Afghanistan and Tajikistan is exemplary of the way in which organized
crime actively feeds off of and reinforces the inability of a state to govern. Literature treats the emergence of
organized crime as an indicator of a weak and failing state. While this may be so, if it actively partakes in
further dismantling the ability of the state to govern then it must be treated as a proximate cause of state
failure against which action can be taken to help prevent its ultimate collapse. The following analysis is thus
guided by the question of how organized crime interacts with other causes state failure, and whether or
not it acts neutrally or contributes to the process of disintegration.

Charles Cater has identified the need to fill both the theoretical and policy gaps between economic and
political perspectives of conflict and state failure. He argues it must be addressed through a proper political
economy approach that integrates the two approaches, consideration is given to the economic elements that
drive and sustain conflicts, which are most notably detailed in Paul Collier and Anke Hoeffler’s study of the
incidence of civil wars in Africa. The authors highlight the importance of ‘greed’, or economic incentives in
both motivating and providing a means for conflict. They argue that the key determinant of conflict
is the availability of exploitable resources to finance it. Neil Cooper analyzes the rise of conflict trade
following the end of the Cold War, he argues that it has particular salience in facilitating both contemporary
conflict and the process of state collapse by providing economic incentives to maintain the comparative
advantage of conflict trade, expressed by chaos. Thus, in theories of conflict and state collapse, both legal
and illegal goods are considered important for the role that they play in financing wars and providing
economic incentives to maintain conflict. Moreover, both approaches suggest that organized crime or
conflict economies have a political as well as an economic consequence.

Political perspectives of organized crime focus on causes such as state weakness, illegitimacy, and security
vacuums. They argue that organized crime emerges in response to opportunities presented by dysfunction
within the state. Such causation theories are complemented by Thomas Schelling’s analysis of the
operational rationale behind organized crime in which he emphasizes extortion, protection, consolidation of
power and the need for protection of and control over territory. His analysis views organized crime not only
as a response to political opportunities, but as a process that continually seeks to undermine the
political life of the state. Consideration of both the economic and political functions of organized crime has
generated the argument that organized crime is a proximate cause of state failure that feeds off of and
reinforces the inability of a state to govern by creating incentives of ‘greed,’ conditions of ‘grievance,’ and
exploiting ‘need.’

Operationally, the nexus is understood in relation to entities, and can take one of two forms. First is the
adoption of the tactics of the ‘other’ (e.g. a criminal network using terror tactics). For example, criminal
groups in Italy, the Balkans and the Caucasus have adopted terrorist tactics; and terrorist groups throughout
the world have learned to integrate criminal capabilities into their logistical and support structures. Second is
the functional merging of a criminal and terrorist group. This merger can materialize as an ad hoc alliance,
or it can involve the integration of one group into the other.

Conceptually, crime and terrorism are treated as clearly defined actions. As such, a nexus occurs when both
activities occupy the same space and time. In this context of ‘convergence’, a hybrid entity emerges and
simultaneously displays ideological and economic motivations by perpetrating acts of politically motivated
terrorism and engaging in OC for profit maximisation. The group can clearly be defined as criminal or
terrorist, and as such, has the greatest potential of being overlooked by both anti-crime and counterterrorism
agencies. Evolutionally, the nexus refers to the transformation of the tactics and motivations of one entity
into another. For example, a terrorist group may evolve into a criminal network or vice-versa. Although this
is the most difficult type of linkage between OC and terrorism to identify, the ongoing monitoring of group
dynamics - particularly operations, leadership changes, and altered recruitment base – provide a solid
grounding from which conclusions about the driving motivations of a specific group can be drawn.

The depth of the relationship between OC and terrorism is often dependent on the nature of the geographic
region in which any specific nexus operates. Figure 3 (Makarenko, 2007) illustrates the geographic
characteristics associated with linkages between OC and terrorism.

The nexus in Western democracies is largely isolated to the operational plane - focused on terrorist groups
engaging in crime as a source of funding. Here, the nexus is comparatively opaque, with generally
unpredictable repercussions, which can thus be seen as presenting a high security threat. Cases of E.U.-
based criminal groups appropriating terrorist tactics are limited. This is, for the most part, due to the relative
economic and political stability enjoyed by E.U. member-states.

International cases of OCGs using terror tactics to progress their aims (Annex D) are most commonly found
in states experiencing political transformation, instability or limited political control – producing an
environment in which OCGs understand the utility of using terror tactics to further their economic control by
entrenching their political influence.

In transitional states, the nexus includes the operational and conceptual plane, with evidence of convergent
motivations dominating groups operating in regions such as the Balkans. Historically, poor border security,
weak law enforcement, corrupt public officials and established smuggling networks have facilitated the
emergence of hybrid groups that simultaneously sought political aims and profit maximisation. This was
epitomised by the Albanian mafia and the KLA through the mid-1990s, each benefiting from an
interchangeable membership and recruitment base.

Finally, the nexus is at its most interactive and developed in (post) conflict territory, combining each plane
of interaction. Places such as Afghanistan, Sierra Leone, Pakistan, Thailand, northern Mali, Somalia, where
government control is fragmented and extremely weak – if existent at all – foster the nefarious collaboration
between OC and terrorism. Given the predominant environment where conflict and political instability
dominate, neither OC nor terrorist groups have an innate loyalty to the state. As such, risk calculations made
to cross the criminal-terrorist divide are based more on fulfilling immediate benefits rather than assessing
long-term repercussions.

The Commercial Insurgency Framework

The vision of the commercial insurgency approach is to see these organizations as, “a system composed of
differently interacting individuals or sectors with diversified interest.” Palma places this vision within the
greater context of today’s globalized world of cyberspace enabled hyper-connectivity, which has allowed
insurgents to “Increase their possibilities to build transnational networks, to place combatants and militants
beyond the borders of a single state and to increase their linkages of cooperation with other agents through
the region.” The growth and resilience of commercial insurgent groups is based on their ability to exploit
these environmental conditions to form networks beyond state boundaries. This ability comes from what
Palma terms as the “triadic character” of commercial insurgencies, “composed of complementing and
interrelated political, military, and criminal dimensions, in motivational and functional terms.” This review
of commercial insurgency theory will begin with the discussion of motivations and functions, followed by
the triadic dimensions and commercial insurgency structure, and ending with an explanation of primary and
secondary operating environments.

The distinction between insurgent motivations and functions is crucial to understanding commercial
insurgency in itself, and furthermore, to understand how commercial insurgency differs from ‘traditional
insurgency.’ To begin, motivations refer, “to the reason behind combatants’ will to fight,” whereas,
functions refer, “to the type of activity that, as a member of the insurgency, they engage in.” Motivations do
not necessarily imply the reasons for joining the organization, which could vary from financial to coercive,
but rather reasons for staying. In essence, this is what an individual or group is trying to gain from the
transaction, and in the case of commercial insurgency, is likely to be fluid. In traditional insurgency theory,
“all individuals, commanders, and combatants are motivated by a social/political goal,” regardless of their
function––be that of a fighter, financier, or political actor working to build popular support. However, in the
case of commercial insurgency, an additional dimension is required to acknowledge the existence of
individuals and groups who remain members of an insurgency based solely on both functions and motives of
revenue and enrichment. Palma labels this “the criminal dimension,” which in turn establishes the
triadic character of commercial insurgency.

Viewing these organizations as a system, the triadic character further enables the development of the
commercial insurgency structure. The corresponding military, political, and criminal dimensions of this
framework highlight various motivational or functional nodes. Though Palma notes, “such structures are not
mutually exclusive; that is, the organization will not necessarily establish separate units (front, columns,
companies, [etc.]) for each dimension.” What is critical to understand, as is expressed in Figure , is that,
“there is an overlapping; individuals can be part of several dimensions simultaneously.” The letters within
the figure serve to show the multitude of possible overlapping motivations and functions within the
organization (individual letters representing theoretical sectors of the organizations). The theoretical sectors
of commercial insurgency are further detailed in Figure . These sectors serve as conceptual descriptors of
what are in reality complex nodes (gangs, groups, or organizations) of multi-functional and motivated
individuals. Returning the commercial insurgency structure, the military dimension of this structure is
displayed in only functional terms. For, as Palma asserts, “Militants have motivations that can be classified
either as political or criminal, but a military motivation by itself does not have its own logic… There is no
fighting for the sake of fighting.” From this initial foundation the specific of the dimensions can be further
discussed.

While the dimensions of the commercial insurgency structure overlap, each dimension possesses specific
inherent qualities. The military dimension, which, again, only manifests itself in functional terms, is built
around tasks similar to traditional combat forces. Activities include recruiting personnel to meet the
demands of the fighting force; developing and conducting training to increase proficiency and enable
specialization; the planning and execution of the full range military operations, irregular or otherwise;
military supply and logistics, communications, and intelligence operations. Within the scope of the structure,
the military dimension also includes the command and control elements of the fighting force, tasked with
organizing the force, maintaining unit cohesion, and ensuring discipline.
The tasks and activities of the political dimension “may be derived from the creation of a political party or
movement as the cornerstone,” as Palma states. Yet, this may also be built from a clandestine political
structure to leverage existing political processes. Palma continues, “Political tasks relate to the spread of
their discourse, ideals, philosophy, and arguments in search [of] sympathy and support,” of the
population.60 In a hyper-connected world, these actions also include the use of online social networks to
convey and coordinate messages to supporters, rivals, and all in between. Through a variety of organizing
and mobilizing structures, and methods of indoctrination, the political dimension develops the legitimacy of
the organization as, “the de facto authority… [guaranteeing] living conditions for its inhabitants.”61 In areas
where the organization is the established authority, be that directly or through proxy, political tasks also
include administration and acts of government.

Methodology

The merits of this argument will be explored by examining the dynamics of the relationship between the
drug trade and state failure. State failure has a variety of both long-term and immediate causes that interact
with one another to undermine the capacity of the state to govern, and this analysis does not purport to claim
that organized crime is the most important cause nor that eliminating it will prevent state failure. Rather, the
intent is to determine the ways in which it contributes to state failure by interacting with other causes in
order to guide appropriate policy responses. The ensuing analysis will thus examine the role of the drug
economy in relation to state failure, focusing on the following characteristics: endemic violence; lack of
control over territory; ill provision of public goods; and corruption and illegitimacy.

The Jihadi Crime-Terror Nexus

Most studies follow that Islamist organisations adopt the “methods” not the “motives” of criminal groups.
Some scholars, however, have begun to question the motivations of some groups such as al Qaeda in the
Islamic Maghreb (AQIM) and Abu Sayyaf. In his comparative case study of the Mexican cartel La Familia
and Abu Sayyaf, Ballina ultimately concludes that criminal and terrorist groups are capable of
simultaneously pursuing what are typically considered two paradoxical aims: entrepreneurial profit and
ideological ends. It is a rarity for scholars and political figures alike to go further than mere inference that
AQ’s core membership is invested in criminal enterprises. This is rooted in the idea that leaders would deem
criminal association a risk to their ideological credibility. Aronson meanwhile discusses AQIM’s increasing
persistence with kidnapping for ransom and concludes that their terrorist and criminal motivations are
constantly shifting and “fluid”. Nevertheless, the majority of analysis concludes that any relationships
between Islamist terrorist groups and organised crime are of an opportunistic nature, and do not represent
entrepreneurial pursuits of Islamist extremists.

Current Threat Assessment

Europol’s 2012 Terrorism Situation and Trend Report makes a soft conclusion about the nexus trend: “The
connections between terrorist, violent extremist and organised crime networks may become more blurred.
Terrorist and violent extremist activities are often financed through crime or organised crime activities. In
some cases the same individuals who are engaged in terrorism or violent extremism are also involved in
organised crime activities.”In tandem with the terrorism report, the 2011 Europol Organised Crime Threat
Assessment feebly refers to the “possible links between drug traffickers and terrorist groups". Since 9/11, the
U.S. Treasury, Federal Bureau of Investigation (FBI), and the Department of Defence (DOD) have
reoriented their focus particularly towards the illicit financing and smuggling operations of terrorist groups.
Since 2005, however, there has not been one congressional hearing regarding the crime-terror nexus. Lastly,
any discussion on counter-strategies solely revolve around operational aspects of the crime-terror nexus to
the detriment of other potential counter-strategies. One such strategy is an aggressive counter-narrative
strategy that divulges the “impure” motivations of Islamist organisations.

METHODOLOGY

In order to identify the scope of the crime-terror nexus, one must develop a useful analytical framework. For
the sake of clarity, a two-pronged model allows one to conceptualise the degree to which Islamist terrorist
organisations are converging with criminal groups. The first part of the two-pronged model is a critical
analysis of current notions of the crime-terror nexus in regards to Islamist terrorist organisations. Using
existing literature on the crime-terror nexus, the analysis will illustrate a clear picture of the Islamist crime-
terror nexus, which will dismantle current notions rooted in the “profit-versus-ideology dichotomy”. The
latter part of the two-pronged model is an investigative analysis on the role of ideology in a sample of well-
established Islamist terrorist organisations. It draws on literature on radicalisation and gangs to show
ideology’s minor role in the joining of Islamist groups. Ultimately, this examination will suggest that the
true motivations of Islamist terrorist groups today are that of criminal organisations, and therefore, crime-
terror threat analysis requires reorientation. Finally, this framework is used to assess the so called Islamic
State as the case illustrates the multiple degrees of organisational and motivational convergence of
modern jihadist terrorist groups with criminal groups.

A critical analysis based on current conceptions in the crime-terror nexus literature, the scope of the Islamist
crime-terror nexus - First explaining the similarities in organisational structure sets the foundation for
understanding how these groups organisationally and conceptually converge. Then the analysis focuses on
two areas of nexus; Collaboration, and activity appropriation. Substantial historical cases including Al
Qaeda and affiliates, Hezbollah, and the Taliban and their relationships with a multitude of criminalactors
around the globe will show the extensive relationship between Islamist terror and organised crime. This
application of the crime-terror nexus will drive the critical analysis of the current arguments made that these
groups will not associate with each other, and that Islamist terrorist groups will not engage in criminal
activity because of ideological disparities. the second prong of the model–an investigative analysis on the
true motivations of Islamist terrorist organisations and the role that ideology plays within these groups. First,
the analysis will show the minor role of ideological motivation within Islamist group dynamics. Research on
radicalisation demonstrates the many reasons for joining extremist groups other than ideology. The literature
on gang behaviour supports the hypothesis that these Islamist terrorist groups are essentially violent gangs,
albeit highly sophisticated and transnational. Interviews with gang members and jihadists highlight
coinciding motivations. Additionally, prison radicalisation studies exemplify the role of prison gang culture
in the radicalisation of the incarcerated to Islamism, and demonstrate that the Salafi-Jihadist ideology is not
the paramount motivation among group dynamics. Second, the analysis will define ideology’s active role in
militant Islamist groups as a means to an end. Citations from fatwas and other sources that justify criminal
activity contribute to this argument. Threat analysis should not focus so extensively on ideology as it
misleadingly distinguishes between Islamist terrorist groups from what they actually are—violent criminal
gangs whose true aims are the acquisition of power, money, and status.

Applying the two-pronged analytical approach to ISIS to illustrate the degree of organisational and
motivational convergence in one of today’s most significant Salafist-Jihadist groups. News articles and
statements given by national security members heavily acknowledge ISIS’s involvement in criminal
enterprises. Financial data alone reflects that ISIS has fully adapted crime in their modus operandi. The
criminal profile of ISIS will be seen to fit fully the contours of the crime-terror nexus as illustrated in
Chapter One. Then, the second investigative approach is applied. Testimonials of ISIS defectors highlight
non-ideological reasons for joining. A discussion on the particular brand of jihadist culture, which has taken
on a “gangster” profile, demonstrates that some followers join for gang-like reasons (i.e. bravado, status,
sense of belonging), rather than for the Salafi-Jihadist ideology. Lastly, a relevant discussion on ISIS
strategy revolving around territory, sophisticated propaganda campaigns, and ideological innovations to
legitimise crime demonstrates the role of ideology not as a motivational end goal, but as a means to garner
power, money, and status.

Setting the Record Straight: The Criminal Profile of Islamist Organisations

Much of the crime-terror nexus literature pertains to the growing operational and organisational similarities
between criminal and terrorist groups. These groups have evolved to a network structure of organisation,
thereby enabling these “netwarriors” to pose as national security threats. The shift to a network structure has
developed the crime-terror nexus in two other areas: 1) Collaboration and 2) Activity appropriation.
Significant cases such as al Qaeda(AQ) and affiliates, Hezbollah, and the Taliban reveal a long established
history with criminal organisations. Additionally, these organisations have pursued their own criminal
enterprises that span the globe. We scrutinise the weaknesses of current convictions of the Islamist crime-
terror nexus, which are often rooted in the notion that profit-motivated criminals and ideologically-driven
terrorists are irreconcilable concepts.

“The Trifecta Threat”

According to Navy Lieutenant-Commander Keenan, Transnational Criminal Organisations (TCOs), Drug
Trafficking Organisations (DTOs), and Islamic extremists are forming a transnational, “trifecta” threat in
which they each participate in an ever developing mode of conflict called fourth generation warfare
(4GW).First coined in 1989,Lind used 4GW to define a decentralised form of conflict that is waged on a
societal, economic, political, and psychological level. Arquilla and Ronfeldt supply the term “netwar”
instead to emphasize the organisational revolution of 4GW: the network. The network is what enables this
trifecta threat to come to fruition. Arquilla and Ronfeldt observe three characteristics that networks possess:

1) Informal, non-uniform relationships that vary in duration and intensity between which coordination
and communication takes places on a situational, not hierarchical basis,
2) Extra-organisational nodes that are often transnational, and
3) Shared norms and values that govern organisational functioning rather than formal decrees. As “net-
warriors”, criminal organisations, extremist groups, and gangs pose an unconventional threat to
nation-states, especially if they are converging in networks.
A brief description of how organised crime groups and terrorist organisations have evolved will show the
modern comparability in structure between these groups.

Third Generation Gangs and Organised Crime

The National Alliance of Gang Investigators 'Association defines a gang as " ...a group or association of three or
more persons who may have a common identifying sign, symbol, or name and who individually or collectively engage
in, or have engaged in, criminal activity which creates an atmosphere of fear and intimidation." Gangs are not
equivalent to criminal organisations, albeit they are related. The latter is distinguishable by a higher level of
organisation and more criminal diversification. The United Nations Office on Drugs and Crime defines
organised crime as " .. a structured group of three or more persons, existing for a period of time and acting in concert
with the aim of committing one or more serious crimes or offences established . . . in order to obtain, directly or
indirectly, a financial or other material benefit."

Traditional examples of organised crime are the Italian, Sicilian, and Russian Mafiosi, the Japanese Yakuza,
and the Chinese Triads. The Latin American drug cartels are an example of market-focused organised crime.
Though most criminal gangs do not evolve into sophisticated criminal organisations, Sullivan and Bunker
use the degree of “politicisation”, “internationalisation”, and “sophistication” as parameters to explain the
evolution of some gangs into organised crime entities. While first generation gangs are turf-oriented and
opportunistic, second generation gangs inhabit intra- or international spaces, are entrepreneurially-oriented,
market-focused, and sometimes have politicised aims. Third generation gangs (3G2) “are the most complex
gangs and they operate—or aspire to operate—at the global end of the spectrum, using their sophistication to
garner power, aid financial acquisition and engage in mercenary-type activities”. Sullivan and Bunker
conclude that “a third-generation gangster is a fully realized net-warrior”. Most commonly cited as a 3G2 is
Mara Salvatrucha (MS-13). MS-13emerged out of the civil war-torn Diaspora of El Salvadorian immigrants
in the 1980s and has grown to such sophistication that they often are referred to as “criminal insurgents”.
Alternatively, the Honduran government has designated them a terrorist organisation. Others include the
Black P Stones (El Rukn) and M-18. Renken’s compiled table of 3G2s identifies the Mexican DTOs as
marking “high” in politicisation, sophistication (“Network Structure”), and internationalisation.

Shelley et al notes that criminal groups are comparable to their terrorist underworld counterparts: “Most
organised crime now operates not as a hierarchy but as a decentralised, loose-knit network—which is a
crucial similarity to terror groups.”Organised criminal groups are reaching new areas of the globe by
connecting with each other, and introducing new clientele i.e. terrorists. A Congressional Research Service
report indicates that criminal organisations are increasing in “size, scope, and ambition”. For example, Sub-
Saharan Africa is an established milieu of Latin American drug cartel activity and prominent Islamist
extremist groups AQIM, Boko Haram (BH), and al-Shabaab. The structural evolution of organised crime
has both expanded the crime-terror nexus by making organised illicit enterprises available to terrorists, as
well as by connecting organised crime groups with terrorists.

Islamist Terror Groups

The evolving structure of jihadist terror today perhaps is the most recognised national security threat. AQ is
the most notable example of this structural transformation from a hierarchical to a network organisation.
Since 9/11, AQ central has downsized by seventy percent. Documents procured from the raid in Abbottabad
reveal that as of 2011, there were 170 core members remaining. Furthermore, counter-terrorism measures
have compelled the group to decentralise. Experts debate the organisational essence of AQ, arguing that it
retains some hierarchical strategic direction and operates as a sophisticated network, or that it is a
fragmented organisation made up of “disconnected regional movements that have little connection with each
other”. AQ’s network comprises of affiliates that assume the mantle of the global jihadi cause, but direct
their operations locally. Indeed, Sageman argues that AQ presently is “just a loose label for a movement that
seems to target the west”. Aside from AQ central and its affiliates, Sageman’s “leaderless jihad” hypothesis
explains another level to AQ’s evolved structure. The jihadist movement, rather than led by an organisation,
is largely an organic grass-roots movement. Sageman instead, characterises terrorist groups as cells
consisting of a much more transient membership base, of whose reasons for joining are due to social group
processes.

Network Convergence

The shift to networks has made it difficult to distinguish structurally between these groups. In a region
where nonstate actors are waging 4GW, criminal groups and terrorists or insurgents are connected to the
same overall threat. Makarenko refers to this convergence as the “black hole syndrome”. Civil warring
groups, whose motivations shift from the political to the criminal, take over failed states and thus are in a
position to perpetuate civil war conditions for economic and political gains. These groups take advantage in
environments of faltering infrastructure, weak governance, poverty and a disenfranchised population.
Makarenko ultimately concludes that modern civil wars today are a representation of crime-terror
convergence. She writes, “they [civil wars] have evolved from wars fought for ideological or religious
motivations to wars hijacked by criminal interests and secured by terror tactics.” She diagnoses countries
such as Afghanistan, Myanmar, Angola, Sierra Leone, and Tajikistan with the “black hole syndrome”.
Northern Nigeria for example hosts a population that has long been drowning in poverty, unemployment,
and government instability—prime conditions for insurgencies, terrorism, and criminal epidemics. Amidst
these conditions, illicit gun trade and “frustrated youth” continue to supply various insurgent groups.
Georges infers that although the deprived population is attracted to the insurgents’ “warped ideological
narrative”, they also are attracted to the economic gains available now that these terrorist organisations are
investing themselves in organised criminal networks.

Ciudad d’Este, the tri-border city between Brazil, Paraguay, and Argentina, is another region that is
symptomatic of increasingly blurred lines between crime and war. Known as “Smuggler’s Paradise”, Ciudad
D’Este is a virtually lawless zone absent of border and trade regulation, and a conspicuous case of a
complex crime-terror nexus. The triangle can arguably be considered the first trans-Atlantic safe-haven for
Islamist terrorist groups, notably for Hezbollah and AQ operatives. In regions where Islamist terrorist groups
operate, organised crime and terrorism thrive together, and are so intertwined, that it is difficult to
distinguish between ideologically and criminally motivated violence.

REGIONAL CONTEXTS
This paper will concentrate on four regional discussions, on Africa; Asia and the Pacific; the Middle East
and North Africa; and Central Asia. Despite the diversity of the individual groups discussed, including Boko
Haram and Al Shabaab, ISIS and Al Qaeda, there was a strong degree of consensus and coherence around a
set of key issues.

Firstly, while collectively, it is acknowledged that interaction between terrorist and transnational organized
criminal groups is not straightforward, each case is context specific, rooted in historical conditions but
constantly evolving. This evolution depends on events at the local, national and regional levels, which are
interdependent, and thus to make any general statements about how organised crime and terror groups
reinforce each other is a challenge. In some cases, groups may take decisions, or make short-term trade offs
for longer term sustainability of their identity and operations, and this works both ways. Links between the
two exist and there are increasing convergences, but attempts to define the groups either as ‘terrorist’
or ‘criminal’ are increasingly challenging and counterproductive. Regardless, in the current climate, the
phenomenon represents an increasing threat to international peace and security.

In almost all cases, territorial control is key to the success of both crime and terror groups, as it allows them
to build legitimacy and raise funds through taxation. Examples across all of the four regions discussed
suggested that in the domains under their control, organised crime and terror groups are increasingly
engaging in exercises of competitive state making. They place themselves as saviours, martyrs or ideologues
who champion the marginalised or those under-served by the state. This under-service can manifest in lack
of security, justice or economic opportunity.

Organised crime groups set themselves up as a dominant provider of livelihoods, and can style themselves
as a “Robin Hood” providing incomes where few legitimate alternatives exist. It was observed that both
terrorist and criminal groups might be able to offer, in certain cases, a better salary and benefits to the
national security institutions or military. Being part of a terrorist or criminal group can provide status to new
recruits, and advertising successes and benefits on social media and within the community is a strategy that
both groups use to enhance their status.

However, with this strategy, the challenge is to make this sustainable over the long term. The groups must
continually raise sufficient funding to guarantee the income and prestige for their members, who can quickly
become disenfranchised.

It was observed that repeatedly the ideology and targets of groups morph and sharpen around militarised
attacks from both national and international audiences. Attacks, particularly those that seem heavy-handed
and asymmetrical, can be portrayed as a form of injustice or victimisation, and therefore serve the recruiting
strategy, build loyalty to the group amidst their members, and increase the legitimacy of their cause, as the
groups style themselves as ‘protectors’ of the underserved or persecuted.

This is true both in the cases of terror and crime groups, and can support them in their fundraising and
mobilisation efforts. Regrettably, groups also gain in status and legitimacy through diplomatic overtures and
attempts to negotiate with them directly around peace agreements.

While it was noted that the experience in the Asia Pacific had shown that criminal groups can be positive
partners in peace agreements, the risk to policymakers comes in favouring short-term stability or violence
reduction over long-term sustainable goals. There remains still much to be learned in how to craft
agreements with armed groups that contribute to sustainable peace whilst at the same time not overlooking
the positions of financial vested interest.

case studies : case of sahel region- aqim

The challenges of untangling the organised crime and terrorism nexus are starkly painted in the case of
Africa, where different groups employ contrasting models, ideologies and implications, and though affiliated
to international terrorism ‘brands’, see their operations and targets vested tightly into their local political
economy, or opportunistically exploiting traversing international illicit flows.

In the Sahel and Sahara, a combination of the region’s enormous expanse and difficult terrain, coupled
with tribal conflicts, porous borders and fragile states, has long marked the area as a hotbed of instability.
Historic trade routes across countries such as Algeria, Libya, Mali and Mauritania have become infiltrated
by criminal and terrorist groups alike, with weak state institutions and widespread corruption allowing these
groups to parlay their activities into political influence and military and financial power.

The regions’ permeability has made it an ideal location for the movement of illicit goods and other forms of
organised crime, such as KFR and drug smuggling. Such criminal activity has often been carried out by
long-standing commercial and social networks based on local tribes and communities specializing in trade
through informal arrangements across the region. Tensions among these local tribal communities have long
underpinned the instability of the region, with tactical alliances proving necessary for OC and terrorist
networks to operate. Indeed, conflict dynamics in the area directly contribute to the muddling of lines
between groups seeking financial and material benefits and those primarily driven by political motives. Such
groups may be characterised as opportunistic, rearranging their alliances once doing so becomes opportune
to promote either their political, ideological or business interests.

Terrorists in the Sahel, in contrast to the FARC, do not traffic in drugs; they simply force established
traffickers to pay a ‘tax’ for transporting the drugs across territory they control. The terrorists, ever sensitive
to the local social and political dynamics, do not seek to interfere with established practices. The groups
operating in the Sahel do not, however, demonstrate a great deal of convergence. Separate institutions
continue to mark their operations in the region. Terrorist groups have not yet demonstrated a willingness to
cultivate in-house criminal expertise. They simply prefer to dawn upon a broad and deep pool of expertise
that can be found across the region. As long as the price paid for such support remains within reason, they
are unlikely to turn away from it. Ideological or theocratic purity may also preclude such a possibility. But
the increased proliferation of AQ-labeled groups, across the region may preview the development of such
capabilities.

Set against this backdrop, terrorist groups have taken advantage of the regional dynamics in order to
promote their ideologies and fund their operations. For example, with its roots in Algeria, Al-Qaeda in the
Islamic Maghreb (AQIM) espouses Salafist Jihadism dogma with regionally resonant elements. The group
has formed tactical alliances with indigenous tribes such as the Tuareg and Berabiche, through marriage and
other means, providing it with a recruitment source and allowing it to become intimately involved in their
criminal activities in order to fund its operations.

The burned skeleton of a Boeing 727 aircraft outbound from Venezuela in November 2009, but registered in
Guinea-Bissau, lays on a makeshift landing strip near Sinkrebaka, some nine miles from Gao, in remote
north-eastern Mali. According to Alexandre Schmidt of the United Nations Office of Drugs and Crime
(UNODC), the plane ‘unloaded cocaine and other illegal substances’ and ‘wanted to take off but crashed’
(The Telegraph 2009; Serge 2009). Investigators later determined, however, that the aircraft had been
destroyed after its illicit cargo, estimated at between seven and 11 tons of cocaine had been offloaded. In
June 2011, in an action directly related to the above-mentioned aircraft, three individuals were arrested and
charged with international trafficking in cocaine. On January 19, 2012, the Malian businessman was
reportedly freed by Malian authorities ‘following a demand from a group of young Arabs’ whom the Malian
government has called upon to assist the Malian armed forces in their fight against Tuareg rebels then
demanding the independence of northern Mali (L’Agence France-Presse 2012).The incident was, and
continues to be, cited by many as yet more ‘evidence’ of a growing nexus between radical Islamist elements
active across the Sahel (as-Sahil – the ‘shore’ of the Saharan sea) region of northern Africa, and particularly
in northern Mali, and drug traffickers and other national and trans-national criminal syndicates. This
intersection of criminal networks and terrorist organizations can be broadly grouped into three categories –
coexistence (they coincidentally occupy and operate in the same geographic space at the same time),
cooperation (they decide that their mutual interests are both served, or at not least severely threatened, by
temporarily working together) and convergence (each begins to engage in behaviour(s) that is/are more
commonly associated with the other).

Data to confirm these connections are virtually nonexistent. But, more and more anecdotal evidence pointing
to their existence continues to emerge, particularly after the disintegration of state authority in Libya
and Tuareg uprising and the subsequent French/West African intervention in Mali. Our research is based
upon a close examination of the existing open literature and regional media, which often serves to give a
voice to both the criminals and the terrorists. We have quite consciously tried to shy away from the ongoing
events in Libya and Mali except where they might shed light on our hypothesis.

The Sahel is a densely layered and intricately fragmented sub-region, and the criminals and terrorists who
have chosen to operate there do so as participants in existing social, political and economic environments;
they are not necessarily considered as exogenous actors nor are they necessarily seen as threats. What we
have tried to do is not examine in detail the criminal networks or the terrorist groups, but suggest their
relationships are more complex than most observers posit. Far too often and far too easily every event in the
sub-region is trumpeted as a terror threat, despite the fact that most of the ‘events’ were kidnappings for
ransom, not only in the sub-region, but also Africa, the Middle East, Europe and the United States. Resorting
to anti-terror tactics has led to an exaggerated response by U.S. drone and support personnel in Niger and
French forces intervening in Mali which has dragged West Africa militaries in for the foreseeable future.
Our hypothesis would allow one to argue that the assault on In Aménas gas plant in Algeria was a hostage-
taking attempt that went bad, the May 23, 2013 attacks on Agadez and Arlit in Niger were for demonstration
effect and the recent killing of RFI journalists, Ghislaine Dupont and Claude Verlon on November 2013, an
act of terror.

Coexistence, Cooperation and Convergence of Terrorism, Organized Crime, and

Crime - African Sahara- Sahel region
The incident of the burned plane that had transported cocaine from South America to northern Mali might
support the argument of potential cooperation between groups that coexist in this region. However, it is
important that to determine if this perceived increasing incidence of ‘cooperation’ is indeed reflective of a
global trend or is simply an ad-hoc convergence of factors operating across the region. Such a differentiation
would also serve to determine if the willing acceptance of the ‘cooperation’ argument is an attempt to
substitute the facile global perspective of the ‘war’ against al-Qa’ida (AQ) for a superficial understanding of
the sub-regional security dynamics at play. This position is espoused most vigorously, some argue to the
point of conspiratorial paranoia (Keenan 2009).

Drawing this distinction is essential because since its founding in 2007, AQIM has sought to internationalize
the effort of its predecessor group, the Groupe Salfiste pour le Prédiction et le Combat (Salafist Group for
Preaching and Combat - GSPC), beyond the borders of Algeria. The group made little progress on its own
before announcing its allegiance to al-Qa’ida and that announcement in turn brought international attention
despite the fact that its operations were initially limited to Algeria. The perceived success of AQIM has led
to a continuing proliferation of AQ-branded groups that now operate across the region. This phenomenon
closely parallels the franchising of AQ around the globe. The international community has witnessed a
proliferation of regional and sub-regional groups that declare they have pledged loyalty to AQ. Drawing the
necessary distinctions and differentiations allows the international community to put in place the necessary
policies and prescriptions to deal with the matter, not only in the Sahel, but across the globe: " By knowing
your enemies, you can find out what it is they want. Once you know what they want, you can decide whether
to deny it to them and thereby demonstrate the futility of their tactics, give it to them or negotiate and give
them a part of it in order to cause them to end their campaign. By knowing your enemies, you can make an
assessment not just of their motives but also their capabilities and of the caliber of their leaders and their
organizations (Richardson 2006: 215)."

According to James R. Clapper, the United States Director of National Intelligence (DNI), these increasing
transnational organized crime entities and their links to international terrorism needed to be considered
among the most pressing national security concerns of the United States. The DNI detailed specific areas of
interaction that included: kidnapping for ransom, human smuggling and illicit finance (Clapper 2012: 26–
27). In addition, in a review (the first in 15 years) of transnational organized crime, the international and
intelligence community underscored the argument that a ‘threatening crime-terror nexus’ was a key threat to
U.S. national security: " Terrorists and insurgents increasingly will turn to crime to generate funding and
will acquire logistical support from criminals, in part because of successes by U.S. agencies and partner
nations in attacking other sources of their funding. In some instances, terrorists and insurgents prefer to
conduct criminal activities themselves; when they cannot do so, they turn to outside individuals and
facilitators… U.S. intelligence, law enforcement and military services have reported that more than 40
foreign terrorist organizations have links to the drug trade (National Intelligence Council 2011)."

But is there a trend? All the argumentation, either thematic or specific (as in the Sahel), appears to be based
on anecdotal evidence and not the clear observation of clinical symptoms. This ‘evidence’ in turn, is all too
often based on rumours and/or accusations. We must recognize, therefore, that the plural of ‘anecdote’ is not
‘data.’ It is difficult for a casual observer to definitively determine if such cases merely provide an isolated
example or are reflective of an emerging trend or demonstrate a widespread problem. Any supposed nexus
must in such a case be seen as blurred, conceptually and in reality. Empirical evidence for the crime-terror
link is scarce and varies over time. This makes it difficult to determine what aspects of the relationships are
most significant. Such ambiguity demands much more granular information before any declaration of a
nexus can be made.

It is possible to argue that it is becoming increasing difficult at times to distinguish between international
terrorists and transnational criminals. They both share operational and organizational commonalities and
their actions appear to be increasingly more blurred. Research conducted by the UNODC reveals that during
the past decade there has been significant increase in criminal and terrorist activity in the region (UNODC
2013). It is argued that the current security crisis in the Sahel is explained by the links between crime,
organized crime and terrorism (UNODC 2013).

This paper argues that these commonalties can be grouped into several broad categories of interaction –
coexistence, cooperation and convergence. Each category includes opportunities when a terrorist/criminal
partnership might serve to grow and sustain each organization, bolstering each group’s capabilities,
strengthening their individual infrastructures and contributing to their financial well-being. The U.S.
Intelligence Community confirms that it: " …is monitoring the expanding scope and diversity of ‘facilitation
networks,’ which include semi-legitimate travel experts, attorneys, and other types of professionals, as well
as corrupt officials, who provide support services to criminal and terrorist groups(emphasis added)
(Clapper 2013: 5)."

Such links, however, might be deemed merely transactional. In the case of coexistence, the groups might
both be sharing and/or operating in the same geographic space, but there appears to be little cooperation
between them. But this does not necessarily mean that the activities of each don’t benefit the other. Criminal
organizations and terrorist groups are both dependent upon the presence of weak governmental and law
enforcement institutions. In other words, these groups thrive in the presence of a weak government, which
seems to be the case in the countries of this region. Governments may simply turn a blind eye to criminal
activity, or governmental institutions may simply be too weak to be able to successfully confront the
criminal networks or terrorist organizations. Often those institutions are themselves coopted by criminal
networks, thereby benefitting both the criminal organizations as well as the terrorist groups. The situation in
Guinea-Bissau lends credence to these words of warning. As the National Intelligence Council asserted,
from 2008: "…concurrent with the shift of power among nation states [, t]he relative power of various state
actors – including even criminal networks – will increase. Several countries could even be taken over and
run by criminal networks"- (National Intelligence Council 2008: 81). Criminalized governance benefits
both criminal networks and terrorist groups and fosters an environment that is conducive to both.

Cooperation between terrorists and criminal networks takes place when each group determines that their
inherent fear of contact outweigh the risks. While collaboration might deliver some mutual benefits and/or
satisfy some organizational necessity, there are common disincentives to affecting such partnerships
including increased and unwanted attention and surveillance, fear of compromising internal security through
infiltration and the heightened prospect of capture. Such contact routinely takes the form of ‘pay-as-you-go’
operations, one-off instances of customer-service provider relationships. Criminal networks are likely to risk
disrupting their illicit relationships with governmental institutions only for short-periods of time and only for
lucrative financial returns. Terrorist organizations, on the other hand, are likely to see such contact as merely
the means to an end, their self-declared ideological ends.

It is, however, an open question as to whether these short-term partnerships can mature into long-term
relationships. Most observers argue that far more likely to see the convergence of terrorist and criminal
groups into an organization where the two groups’ separate and distinct operations are merged and conflated.
The international community has already touted FARC as an example of such an organization and, most
recently, the Mexican drug cartels. In fact, the term ‘narco-terrorism,’ it could be argued, was coined to
define just such organizations. Such a phenomenon can be seen as a transition along a crime-terrorism
continuum.

All of these currents have emerged in an area of little strategic importance to the outside world. However,
the Sahel has long been a sanctuary for outlaws smuggling persons, automobiles, gasoline and cigarettes.
The Sahel has also seen this residual banditry merge and become intertwined with international drug
smugglers using the same routes. This should, however, not be unexpected. While much of the region is
uninhabited desert, all human activity – legitimate and illicit – relies on these same routes, converging on
water and fuel stops. Into this context of discontent stepped AQIM in January 2007. AQIM is the latest in a
line of AQ-branded, franchise groups in the region. What distinguishes it from other AQ affiliates is the
degree to which the group had been able to retain a regionally indigenous leadership who remain focused on
conducting operations in the region. According to DNI’s Clapper, AQIM’s ‘intentions and capabilities
remain focused on local US and Western interests in northern and western Africa’ (Clapper 2013: 5). This
might, however, change in response to the intervention in Mali by France, Chad and the West African states
that comprise the Economic Community of West African States (ECOWAS). AQIM is deeply rooted in
recent, post-independence, Algerian history. A full-fledged civil war erupted in Algeria in 1992 after
Algerian government authorities cancelled a second round of parliamentary elections in response to an
overwhelming and unexpected victory by ‘Islamist’ parties. The fighting was led by the Groupe Islamique
Armé (Armed Islamic Group - GIA); a group composed of Algerian veterans of the war against the Soviet
Union in Afghanistan. In September 1998, a GIA commander Hassan Hattab broke from the GIA and
formed the GSPC. Critically, the GSPC successfully incorporated the GIA’s Saharan branch (Filiu 2009: 2–
4). The GIA, deeply rooted in Algeria, had kept its distance from AQ and struggled to maintain its
independence, rejecting foreign participation in its jihad, which ended in 2003 after the leader of the GSCP
was forced out by Abdelmalik Drukal. Drukal later sought closer ties to AQ by pledging allegiance to
Osama Bin Laden (Morgan 2013; Filiu 2009).

By March 2003, the GSPC allegedly abducted 32 tourists in groups numbering from one to eight on six
different occasions from the Illizi region of the Algerian Sahara. In what was arguably an instance of the
industrial kidnapping for ransom industry that has come to mark the region, secret negotiations followed
shortly thereafter and the hostages were released in two groups, the first in May 2003 and the second in
August 2003. Interestingly, the first group that was kidnapped was freed by the Algerian army after an
action that resulted in the death of nine GSPC members. But some of the kidnappers escaped. They re-
emerged months later in northern Mali where the remaining 14 hostages were freed after Germany, Austria
and Switzerland reportedly paid a ransom of €5 million (Daniel 2012: 87–95). This incident is often
considered to mark the emergence of criminal action by a terrorist group to finance its operations (Scheele
2012: 89–92; Daniel 2012: 98).

The emphasis on extra-Algerian operations was driven almost exclusively under the direction and at the
instigation of a single individual who continues to dominate all aspects of any discussion of the links
between organized criminal networks and terrorists across the Sahel, Mokhtar Belmokhtar (‘Khalid Abu
Al-Abbas’). In 2000, Belmokhtar broke with the GIA and switched his allegiance to the GSPC, managing to
hold to his operational autonomy and leading the operations in Mauritania mentioned above. He slowly
integrated himself into the social fabric of the region by marrying the daughter of one of the Bérabiche Arab
tribal families that control the regional smuggling routes. He had already established contact with
the Tuareg in the region during the negotiations for the release of the hostages taken in 2003. Belmokhtar
was keenly aware of the fact that no activity in the region was conducted without at least the approval and
consent of the local population. In direct contrast with the practices of the GSPC in Algeria, Belmokhtar did
not levy ‘taxes’ on the local population to support his operations (Scheele 2012: 100–105; Fisk
2013; Morgan 2013).

Kidnapping for ransom

AQIM uses historic trade routes and strategic alliances to facilitate its most lucrative source of funding-
kidnapping for ransom. Estimates relating to the amount of revenue that AQIM generates from KFR varies,
but figures suggest that in the period of 2003-2012 alone, the group brought in nearly $89 million, focusing
on nationals of countries (particularly Europe) that have been known to be willing to pay ransoms.
Following a series of kidnappings of foreign nationals 40 and terrorist attacks, the international community
took action against AQIM, and in 2013, the UN peacekeeping mission MINUSMA was launched, along
with French Operation Serval in Northern Mali in cooperation with local forces. While these interventions
succeeded in driving out jihadists in the area and weakening AQIM’s operations, the group has since moved
further south, deeper into the Sahara and has resumed operations unchecked by weak state structures.
Belmokhtar increasingly turned to smuggling cigarettes, earning for himself the nickname ‘Mr. Marlboro’ –
Marlboro being the most popular brand transported but also including Gauloises, Legend and Gold Seal.
From Algeria, the cigarettes are moved to their final destination Italy. (Scheele 2012: 45–63; Morgan 2013).
In the process, Belmokhtar raised his profile to the point that air strikes against his camps were
recommended (The Guardian 2010). Viewed in the region as a combination of Robin Hood and the Scarlet
Pimpernel, Belmokhtar is said to be ready to rob, smuggle or kidnap anyone or anything for anyone for the
right price. Belmokhtar is, however, perhaps best known for using kidnapping for ransom to finance his
operations. He was behind the December 2008 kidnapping in Niger of the Special Envoy of the Secretary
General of the United Nations to Niger, Canadian Robert Fowler, and his compatriot, Former Canadian
Ambassador to Gabon, Louis Guay (Fowler 2011). Fowler’s kidnapping was the most noted of the
kidnappings Belmokhtar was believed to have conducted, prior to the attack on In Aménas. But his and
AQIM’s direct involvement in the actual abductions is an open question. Many argue that local criminals
actually carry out the kidnapping and then sell the hostages to AQIM affiliates for a profit (Cristiani and
Fabiani 2010). The AQIM affiliates conduct the negotiations extorting ransoms from the national
governments of the hostages. This has led to the creation of ‘gangster-jihadists,’ a term most often used by
French parliamentarians, 90 per cent of whose financing is derived from ransoms. The 2003 kidnapping of
the 32 Europeans set a precedent. The major targets were French, because of France’s colonial past in the
region, and Spanish, due to the historical myth of al-Andalus. Americans were to be avoided because it was
believed the U.S. Government would not pay ransom, but other governments would.

In early 2008, a series of kidnappings across the region unfolded. By early 2012, 42 individuals had been
targeted. Five were killed or died in captivity and 24 released (Lacher 2012). While the national
governments of the hostages deny paying ransoms, estimates of the total ransoms paid range from a low of
US$45 million to an Algerian estimate cited in a French parliamentary report of US$150 million. Most
observers believe that US$90 million is the most likely figure. As Lewis and Diarra reported, a Swiss
government report in 2010 confirmed the country had spent 5.5 million Swiss Francs (US$5.9 million) in
2009 to free two Swiss nationals being held in Mali. Another report showed that 2 million Francs were
allocated to pay Swiss workers who participated in the operation (Lewis and Diarra 2012: 2). Author Serge
Daniel, provides ‘data’ on ransoms provided by other governments that include Spain, (between €8 and €9
million), Canada (‘some millions’), Austria (between €2.5 and €3.5 million), and Germany (€5 million)
(Daniel 2012). According to David S. Cohen, U.S. Department of the Treasury Undersecretary for Terrorism
and Financial Intelligence, ‘In 2010, the average ransom payment per hostage to AQIM was US$4.5 million:
in 2011, that figure was US$5.4 million’ (Nossiter 2012). These reports were reinforced with the October
2013 release of four French hostages taken in 2010 when there were immediate reports of a ransom of €20–
25 million (Berthemet 2013; Carayol and Roger 2013). Despite his having been credited with discovering
this money-making machine for AQIM, Belmokhtar chafed under the AQIM leadership in Algeria and in the
end of 2012 broke with AQIM and announced the founding of his own AQ-affiliate ‘al-Mouwakoune Bi-
Dima’ (‘Those Who Sign with Blood’). It was this battalion that was allegedly tied somehow to the attack
on the gas plant facilities near in Amenas in south-eastern Algeria in January 2013.

This attack brought the issue of the links between terrorists and criminal networks before the general public
in the most dramatic manner. It came only five days after the French/ECOWAS intervention in Mali which
was in response to the purported threat in Mali by AQIM through its supposed affiliate Ansar Dine. The
hostage crisis ended with major loss of life, including at least 37 expatriate workers and 29 militants. The In
Aménas incident serves as an adequate metaphor for the question of a terrorist-criminal nexus in the Sahel.
The attack was immediately cast by the media and most of the international community as a terrorist act
committed by AQ. It was attributed to either AQIM or ‘al-Mouwakoune Bi-Dima’ and labelled as an AQ-
affiliate attack. Belmokhtar lent credence to this claim when he released a video claiming responsibility for
the attack. Missed, however, in most of this discussion was the fact that Belmokhtar labelled his group an
AQ-affiliate but did not claim any affiliation with AQIM. We would argue this is important as it lends
credence to the argument that the attack had little to do with the French intervention in Mali (it had to have
been planned well in advance of the intervention) and was more a reflection of Belmokhtar’s in-fighting
with AQIM leader Drukal. This dispute is personal. It did not revolve around some obscure theological
distinction drawn between Sunni and Sufi interpretations of Islamic text. Belmokhtar, with the In Aménas
attack, threw down a challenge to Drukal on his own territory – Algeria. In addition, the attack’s timing,
following so closely on the international intervention in Mali, possibly allowed Belmokhtar to assert his was
the first reaction to the infidels, no matter that the attack seems, upon close examination, to have been yet
another example of a kidnapping for ransom event. As has been noted in another context, the attackers were
acting ‘more like Mafiosi than mujahideen’ (Peters 2010: 11).

The direct involvement of ‘al-Mouwakoune Bi-Dima’ can also be questioned. The leader of the assault,
Bouchened, asserted that his group, ‘Movement for the Sons of the Sahara for Islamic Justice’ conducted the
attack. The group, formed in 2007, is most often described as ‘smugglers operating in Algeria.’ Determining
if the attack was in fact an example of the ‘pay-as-you-go’ operations criminal organizations have
undertaken across the region before will be difficult to determine as Bouchened was killed on the second
day of the siege. His death, however, might serve to explain why the kidnapping effort quickly turned into
an effort to destroy the gas facility; the militants were not prepared for anything more than trying to earn
money quickly. It should be noted that it was claimed that Belmokhtar was killed in a battle in the Ametahi
Valley in northern Mali on March 2, 2013. His claim of conducting the attacks at Agadez and Arlit in May
2013 was clearly meant to ‘refute’ this claim.

Drug Trafficking

In addition to its KFR activities AQIM is largely involved in drug smuggling, and has been known to offer
“protection” to drug cartels primarily originating in Latin America for passage across the harsh terrain of the
Sahel and onward to Europe. Beyond these taxes, the continued relationship between AQIM and drug
trafficking syndicates has expanded to include other forms of criminal activities, including cigarettes,
humans and arms.

In addition to taxation, Al-Shabaab has been known to directly engage in criminal operations. For example,
the group has been linked to heroin trafficking, moving products through port towns and onward to Europe,
along with cocaine transported as sugar or rice aboard trucks into Kenya. Al-Shabaab has also been known
to have strong links to ivory poaching, with reports estimating, that the illicit trade funds up to forty percent
of the group’s 5,000 strong army.

Although advocating the spread of Islamist ideology on a “universal battlefield” through its criminal
activities, AQIM’s operations have generally remained confined to the region, suggesting that the group’s
ideological espousal has become a mere pretext for its engagement in highly lucrative criminal activities.
Boko Haram has also generally focused its attention on local grievances rather than regional and
international expansion, reinforcing the idea that expansion of their message may not be the ultimate goal.
African terrorist organisations can be characterised as opportunistic movements, blending religious ideology
with the pragmatic objectives of generating profits. Indeed, while such groups espouse Islamic dogma, these
groups have developed a growing penchant for engaging in criminal activities and have moved further away
from their ideological aims. Likewise, criminal activities have enabled Al-Shabaab to enhance their
monetary capabilities, which in turn provides them greater access to sophisticated weapons and other
equipment, allowing them to exert greater influence on local communities and expand the potential pool of
new recruits. Combined with ineffective state institutions, space has been created for Al-Shabaab to form a
relatively well-functioning administrative structure in these areas.

Arms trafficking
The de-stabilisation of Libya has also been a major component in the region’s instability and contributed to
terrorist and OC operations. The fall of the Qaddafi regime opened a “Pandora’s box” of regional volatility,
including spurring a proliferation of weapons in the Sahel-Sahara region. Libyan arms obtained by AQIM
and other forces have been smuggled to groups such as Boko Haram and AlShabaab, emboldening and
enabling them to mount more deadly attacks and further their illicit activities. In the East, Al-Shabaab has
taken advantage of porous borders with Kenya and South Sudan to coordinate with local criminal networks
to smuggle weapons into neighbouring countries, further undermining state institutions, security and
stability in the region.
Like AQIM, Boko Haram, which aims to establish a fully Islamic state in Nigeria, has garnered a large
portion of its funding through KFR and brutal killing and abuse. Named by the Global Terrorism Index as
the world’s deadliest terrorist organisation in 2015, Boko Haram has also been known to engage in criminal
“banditry,” carrying out bank robberies and looting and killing indiscriminately. Thus far, national and
regional responses to the group have focused overwhelmingly on military measures with little success.

Taxation
In addition to direct engagement and fuelled by the erosion and/or absence of State structures in the
region, these terrorist groups have also been known to participate in criminal activities indirectly, by
charging “taxes”, in reality extorting both local populations and criminal groups alike in order to fund their
operations.

Al-Shabaab largely funds its operations through a broad-based taxation system of local populations and
criminal groups. Straddling the line between taxation and extortion, Al-Shabaab collects information on
businesses in areas under its power (where there is a complete absence of government control), and levies a
variety of taxes and fees, including special collections for humanitarian and development aid agencies to
work in the area, all of which are reinforced by the threat of violence.

In lieu of government rule in these areas, the group uses these collections to provide services to the
communities in order to gain legitimacy and continue its operations unchecked. Al-Shabaab’s control of
Somalia’s major port in Kismaayo, has been a cornerstone in carrying out its criminal activities. One of the
largest sources of the group’s funding stems from the charcoal and sugar trade, where the group charges
taxes to traders leaving the coast bound for the Arabian Peninsula, despite significant military set-backs and
UN Security Council Resolution 2036 (2012) which put a ban on the Somali charcoal trade.The expanding
charcoal trade has enabled relationships to develop between Al-Shabaab and illicit local and international
traders, and through extensive taxation, the group is thought to be making USD 38-56 million per year.
Additionally, despite harbouring ideological differences, the group uses its influence on the coast to tax
pirates operating in the Gulf of Aden, cooperating with these criminal counterparts for “business purposes”,
including the exchange of weapons for training.

Collaboration/Alliance
As criminal and terrorist groups have grown into transnational entities and diversified their enterprises and
clientele, it is inevitable that they will come into direct contact. The principal assumption on the
collaboration between terrorists and criminals is that they will not work together due to their ideological
differences and the presumable risks they would bring to the professional relationship.

Bove-La Monica recognises the United States government’s feeble acknowledgement of collaboration.
Those that do recognise collaboration characterise it as sporadic, short-term, and opportunistic. Additionally,
the current restrictive environment (i.e. counter-terrorism measures, lack of state funding, etc.) serves as
their explanation as to why these groups resort to alliances or the development of in-house capabilities. For
instance, the Canadian Centre for Intelligence and Security Studies upholds the principle assumption based
on ideological disparities as well as the predication that these relationships exist only for logistical and
tactical convenience given the restrictive operational environment. Furthermore, long-term alliances are a
very rare phenomenon and are not likely to be a future trend. On the contrary, there have been significant,
global alliances between Islamist organisations and criminal groups. Such historical bedrock of the crime-
terror nexus supports the conclusion that collaboration of all degrees—short-term and long-term—is
undeniably occurring. Moreover, the existence of these relationships suggests that ideological disparities are
not inhibiting collaboration.

To begin, one needs to demonstrate how unconventional collaboration occurs in today’s modern threat
environment. As a result of the structural shift to decentralised, flatter networks, relationships between
organisations no longer come into fruition by concrete directives from up top. Relationships occur more
organically now. A nod to Sageman’s term, Dishman refers to the “leaderless nexus” to explain how the
network form of terrorist groups and criminal groups has led to further crime-terror convergence. He
hypothesises that mid- and low-level leaders of dispersed cells increasingly pursue previously censored
relationships, which eventually evolve into long-term, synergistic collaboration. More “mid-level” and “low-
level” jihadists are making the decisions, even though they may seem to act contrary to strategic objectives.
Herein lies the weakness of networks. Some of these low-level decisions are short-sighted, and may even act
contrary to the strategic vision of core leaders. According to Rollins et al, the “the core leadership” of
prominent terrorist groups (i.e. Hezbollah and AQ) “are not known to be significantly partnered with [TCOs]”
because they want to avoid increased attention from governments and security breaches, or they do not wish
to engage in ideologically contradictory criminal activities. The “leaderless nexus” , however, illustrates the
diminishing role of the core leadership. Relationships occur between smaller, dispersed nodes among low-
level members. Governments should not expect to witness Joaquin Guzmán and al-Zawahiri rendezvousing
in the caves of Afghanistan. This does not mean that “significant partnerships” are not occurring.
There are numerous criminal-terrorist linkages occurring between nodes that all together cast a wide net-
threat. Demonstrating the point is an example that the literature has almost completely neglected—the
allegations that AQ and the Sicilian Mafia have been collaborating together. Italy’s political crime unit
estimates that over one thousand AQ operatives have passed through Italy, most likely with the help of the
Camorra (Napolese Mafia). Additionally, the Camorra has taught these operatives the art of document
forgery. This tactical and logistical relationship may represent a miniscule pocket of the global jihadist threat.
That said, policymakers must account for the current realities of net war. Small scale relationships between
non-state actors, empowered by information technologies and networked communication, can pose a
formidable threat. AQ operatives, with a very limited degree of collaboration with Italian Mafiosi, have been
able to expand their networks throughout Europe.

There are also relationships of a more strategic and symbiotic nature between organisations. These represent
more than opportunistic grabs, but rather the entrepreneurial pursuits of notable Islamist organisations.
AQIM is a relevant example of the well-established collaborative history between Islamist and criminal
groups. The antecedent of AQIM, the Salafi Group for Call and Combat (GSPC), had ties to Algerian and
Moroccan criminal organisations since its inception in 1992. According to Scheuer, these organised crime
groups provided continuous monetary and arms support to the Algerian insurgents for over a decade.
Islamist terrorist groups in the Maghreb, Libya, Morocco, and Tunisia are among the poorest as they do not
receive much private funding from donors in the region. Consequently, they have long depended on
criminality for funding, whether it originates from the “petty theft” of the European diaspora, or from
profitable cooperation with sophisticated criminal organisations. In 2007, GSPC assumed the name of
AQIM, and AQ, through network affiliation, gained access to a mature relationship with North African
organised crime.

Other criminal groups are now gravitating to the region. A DEA report on the arrest of three individuals
reveals the complex and multi-partied nature of the criminal-terrorist nexus emerging in the Maghreb and
Sahel regions. The DEA reports, “The charges stem from the defendant’s alleged agreement to transport
cocaine through West and North Africa with the intent to support three terrorist organisations—Al Qaeda,
[AQIM] and the Fuerzas Armadas Revolucionarias de Colombia (“FARC”).” The individuals, who were AQ
supporters, agreed to help FAR Coperatives in transporting cocaine from West Africa to Europe through
Spain. DEA Acting Administrator Michele Leonhart warms, “[These] allegations reflect the emergence of a
worrisome alliance between [AQ] and transnational narcotics traffickers.” Judging by the complex crime-
terror relationships throughout the Maghreb and the Sahel regions, it is clear that ideology has not stopped
these groups from interacting with each other, and establishing mutually beneficial, long-term relationships.

According to assumption, Jihadist groups apparently bring unwanted risks to the business rapport. After 9/11,
when the United States had declared the “war on terror”, the crime-terror nexus only expanded. Despite the
presumable risks of the vigorous United States military agenda, AQ still proved a viable business option for
prominent TCOs. Cyberspace perhaps shows the earliest symptoms of an expanding crime-terror nexus. A
news article from Future Intelligence reports that after 9/11, AQ sought immediate help from the Russian
mafia to move funds and “develop extremist websites”. The Russian gangs agreed to launder and transfer
funds, supposedly charging a seventy-five percent interest fee due to the possible risks incurred. The
Russians, notorious for their cyber capacities, did not avoid America’s most sought after terrorist
organisation.
Neither did Mara Salvatrucha, (MS-13). Williams in the al Qaeda Connection, details an elaborate
relationship between the transnational gang and AQ. MS-13 agreed to utilise their human and drug
smuggling routes to conceal AQ operatives across the Mexican American border. In response to this
relationship, the Honduran government cracked down with a zero-tolerance policy, making the membership
of MS-13 illegal and a punishable crime worth twelve years in prison. Nevertheless, this law did not
dissuade the gang from engaging with their new clients. Instead, MS-13 responded by “beheading scores of
victims and leaving notes on the bodies for the Honduran government.”Though there is no definitive
evidence that any AQ operatives have successfully crossed the Mexican-American border, eye witness
accounts in 2004 confirmed the presence of at least one significant AQ extremist, residing in what is now
called “terrorist ally” in the Northern Province of Sonora. Adnan el-Shukrijumah, who had risen to a
commanding rank in AQ, was first identified in Honduras at a restaurant—dining with four MS-13 chiefs
from Panama, El Salvador, Mexico, and the Honduras. " By 2002 the most notorious terrorist organisation in the
world came to a financial agreement with themost violent street gang on the American continent […] In exchange for
safe passage across theborder, shelter within the states, and a bogus matricula consular, al Qaeda—through its cells
in SouthAmerica—agreed to pay Mara Salvatrucha from $30,000 to $50,000 for each sleeper agent.”

Current threat assessments underestimate the risk TCOs and 3G2s like MS-13 are willing to take. Profit is a
powerful motivation. In an interview with MS-13 member Felix Ortega, Williams asks why the gang is
willing to associate with AQ. Ortega’s answer: “Money. That is the reason for everything.”Similarly stated,
a former FBI agent reports that a cooperating “high-level Mafia figure” said the Mafia would have no
qualms about helping terrorists smuggle people into Europe—“The Mafia will help whoever can
pay.”Islamist terrorist groups appear to be viable clients for multiple TCOs. To these groups, the risks are
worth it. Lastly, it is important to recall the predication made that these inter-organisational relationships
come to fruition because the counter-terror environment thwarts ongoing, traditional Islamist terror
operations. In other words, Islamist terrorist groups are compelled to seek alliances as a last resort.
Suggesting otherwise, today’s most relevant Islamist terrorist groups (i.e. AQ, Hezbollah, and Islamic
Movement of Uzbekistan) began associating with organised crime even when they had abundant state
funding and a relatively stable safe haven. Undeniably, terrorism is an expensive venture; like any business
start-up, terrorists require vast amounts of money. That said, it is a valid assessment that these organisations,
“founded on strong ideological principles”, were also founded upon sturdy linkages to criminal
organisations.

The Shia Islamist group Hezbollah, for example, was born into Lebanon’s 1970s and 1980s narcotics boom.
Lebanon (particularly the Bekaa Valley) was the leading producer of marijuana in the Middle East. Just a
few years after the 1978 Israeli invasion of Lebanon, Hezbollah established itself, largely recruiting from the
Bekaa Valley tribes. Cilluffo of the Center for Strategic and International Studies (CSIS) maintains that the
Bekaa Valley serves as Hezbollah's main base for narcotics operations. Meanwhile, according to the DEA,
Lebanese Colombians and Lebanese Shia in Lebanon have had established connections since the 1980s.
These ties have only expanded, with Lebanese diaspora members being the kingpins of drug rings across
South America. In an operation in 2007, an undercover DEA agent managed to gain the trust of drug ring
leader Chekry Harb. Over a two year period, the agent collected intelligence on drug routes and recipients,
while he alone laundered twenty million dollars during his operation. Harb’s enterprise reportedly
contributed twelve percent of Hezbollah’s total income from narcotics. This elaborate business unfolded in
the midst of receiving substantial state sponsorship from Iran. Levitt states, “Iran has long been believed to
fund Hezbollah to the tune of at least $100 million per year.”Analysts currently estimate that Iran bestows
up to $200 million per year to Hezbollah. The picture is clear—from its birth in the early1980s to this day,
Hezbollah was and is founded on supposedly ideological principles, but equally so on criminal
entrepreneurialism.

Activity Appropriation
Not only do terrorists collaborate with organised crime groups, but they conduct their own criminal
operations as well. Mandel observes, among the different violent actors—criminals, warlords, terrorist, and
insurgents—“Criminal activities have become the common denominator.”This last section demonstrates that
Islamist jihadist groups will invest themselves in virtually any illicit market in order to generate money.
Given the sheer quantity of criminal activity involvement among jihadist organisations, ideology does not
appear to restrict Islamist extremist groups in the least. Government awareness of Islamist organised crime
has increased in the last decade, yet, under estimation characterises the analysis of the true extent of Islamist
terrorist involvement in criminal enterprises. While after 2001,the U.S Treasury, the FBI, and the UN
reoriented counter-terrorist financing measures, they do not cover the whole gamut of terrorist financing.
Indicative of this is the fact that AQ in Iraq (AQI), what is now the Islamic State, was fully self-funded and
resilient by 2006.Analysis of documents from the Department of Defense’s Harmony Database
indicates that “outside donations amounted to a tiny fraction—no more than 5 percent—of the group’s
operating budgets from 2005 until 2010.”Counter-terrorism measures appear to suffer from significant lag
time.

The criminal profile of Islamists groups is quite substantive and diverse. An expert group for the UN Office
on Drugs and Crime states " […] terrorist groups are frequently involved in other crimes, particularly
illegal drug trafficking, smuggling of migrants, falsification of travel and identity documents, trafficking in
firearms and exploitation of illegal markets, inter alia, to support their activities". In addition to these
enterprises, extortion is a staple modus operandi among prominent groups including Al Shabaab, BH, AQIM,
and ISIS. The UN Security Council Monitoring Group lists extortion and taxation as al Shabaab’s largest
income source ($70 to $100 million annually), whilst “diaspora support” and “external assistance”
contribute the smallest amount of funds. The Sahel region shows an increased threat of kidnapping for
ransom (KFR). Pantucci claims that AQIM’s ransom money pays for food, clothing, and weapons, as well as
covers bribes for the local tribes. A Senior Fellow at the Foreign Policy Research Institute indicates the
supply-demand sophistication of the kidnapping outfit in the Sahel, as local gangs now kidnap victims and
put them up for sale to Islamist terrorist groups. Most recent reporting is occupied with the “gangland-style
shakedowns” of ISIS. ISIS’s extensive funding comes from extortion rackets, illicit trafficking of oil,
looting, and bank robbing.

One particular illicit market—heroin—exemplifies the sophisticated entrepreneurial capacity of modern day
Islamist terrorist groups. The Taliban’s involvement with Afghanistan’s heroin trade, though only one
example, has global impact, and involves many actors. The story of the Taliban and heroin is one of a
systematic takeover of an entire country’s illegal drug market and the establishment of a global DTO. Ron
Moreau of Newsweek labels the Taliban as the new “Drug Mafia” of Afghanistan. Afghanistan has been the
number one producer of the world’s heroin since the1990s, the crop now comprising an estimated forty to
fifty percent of the country’s GDP. Muhammad Abdali, head of Afghanistan’s anti-drug task force claims
that the Taliban has deep roots in Afghanistan’s heroin product. He specifically names two of the Taliban’s
most powerful commanders, Akhtar Mohammad Mansoor and Mullah Dadullah Akhund (now deceased)
who “were already thriving drug dealers back in 1994, just as the Taliban movement was launching.”

The Taliban could never have developed Afghanistan’s sophisticated drug enterprise without Osama bin
Laden. Williams accounts for bin Laden’s early solidification with Taliban leader Mullah Omar (now
deceased) in 1996.Before arriving in Afghanistan, bin Laden visited Albania to set up AQ training bases in
the Balkans, and also to meet with the Turkish bubas, or drug lords. The Turks for almost half a century
oversaw the heroin trade from Afghanistan to Iran and then to Bulgaria, while the Sicilian Mafia then
shipped the product to Greece and Yugoslavia, and then to Western Europe. Just after bin Laden and Mullah
established a partnership, bin Laden once again met with the bubas in Albania “in order to usurp the control
of the global narcotics trade from the Sicilian Mafia.” While the Taliban commandeered the entire supply
end of heroin in Afghanistan, the Albanians forged new smuggling routes, and effectively ousted the
Sicilians from heroin trade in the Balkans. Moreau observes the core Taliban leaders' further investment into
the “upstream and downstream sides of the heroin and opium trade". They are involved in every stage of
production, from cultivation to shipment overseas. The heroin case demonstrates more than a mere
“opportunistic” approach of Islamist terrorist groups to the illicit drug trade. Instead, the Taliban and AQ
exhibited an aggressive entrepreneurial motivation, equal to that of any criminal organisation.

Narcotics and Armed Conflict: Interaction and Implications

The link between armed conflict and the production and trafficking of illicit drugs has been much noted in
the popular literature, and recent research tentatively indicates a link between lootable resources, including
narcotics, and conflict duration. Yet the specific dynamics of the linkage between narcotics and conflict
remain poorly understood. Evolving theory on the link between organized crime and terrorism enhances and
supplements the debate on economic incentives in civil war, proposing mechanisms whereby insurgent
groups interact with narcotics production—a crime–rebellion nexus. Studies of nine major narcotics-
producing areas indicates strong support for this nexus. Rather than generating or being generated by drug
cultivation, armed conflict qualitatively and quantitatively transforms existing drug cultivation. Importantly,
armed conflict is itself deeply affected by the narcotics industry, which tends to strengthen the capacity of
insurgent movements while weakening that of the state. A momentous aspect of the crime–rebellion nexus is
the effect that the drug industry tends to have on the motivational structures of insurgent groups: criminal
involvement in some instances creates an economic function of war and vested interests in the continuation
of armed conflict. This has substantial implications for strategies to resolve armed conflict involving the
production and trafficking of illicit drugs.

The relationship between economic incentives and armed conflict has been accorded considerable attention
in recent academic literature. Indeed, following the end of the Cold War, economic motivations have
increasingly been blamed for the actions of belligerent parties in intra-state armed conflict, especially in the
developing world. In particular, the discourse has cantered on the role of natural resources in the onset and
duration of conflict, with African “conflict diamonds” being the perhaps most widely publicized example.
An issue that has received considerable journalistic treatment but relatively scant systematic research is the
relationship between illicit drugs and conflict.

The interaction between protracted civil war and the cultivation and trafficking of narcotics is in fact
increasingly observable around the world. This is particularly the case regarding coca and opium, the crops
from which the most potent and profit-bringing psychotropic substances, cocaine and heroin, are produced.
Today, the bulk of the global cultivation of opium and coca is taking place in conflict zones, while the
trafficking of their derivatives has come to heavily involve insurgent and terrorist groups operating between
the source and destination areas of illicit drugs. This was not always the case: in the 1960s, countries such as
Turkey, Iran, and Bolivia produced much of the world’s opium and coca without experiencing armed
conflict. But presently, the production of these drugs is concentrated in Afghanistan, Burma, Colombia, and
Peru—four countries that have been ravaged by some of the world’s longest-lasting civil wars. This trend
raises important questions as to the reasons behind this phenomenon and its implications.

Over time, international controls have limited the number of people who take illicit drugs to a small fraction
of the world’s adult population, much smaller than those who use other addictive substances, like tobacco
and alcohol. This undeniable success has also had a dramatic unintended consequence: a criminal market of
staggering proportions. The share of the world population (age 14-64) that does not take illicit drugs is much
larger (95%) than the fraction of humanity that does use them, even on an occasional basis (5%). Problem
drug users are estimated at no more than 26 million people – a very modest 0.6% of the world adult
population. Furthermore, the number of people in the world using illicit drugs has remained relatively stable
during the past several years. Also noteworthy is the fact that far fewer people use illicit drugs than use licit
addictive, and often lethal substances such as tobacco and alcohol. And far fewer people die as a result of
illicit drugs (a tenth or less). This is a welcome change
with respect to the rapid increases of illicit drug use
recorded at the beginning as well as at the end of the
20th century. Although countries cannot parade all the
addicts-that-never-were because of prevention and
interdiction, progress has been undeniable.

The international drug control system has endeavoured

to restrict the use of dangerous drugs to medical
purposes and to stop them from spreading throughout
society. Health programs, together with law
enforcement, have played a key role in implementing
this control regime. If unattended, this criminal market
will offset the many benefits of drug control. In fact,
the crime and corruption associated with the drug trade
are providing strong evidence to a vocal minority of pro-drug lobbyists to argue that the cure is worse than
the disease, and that drug legalization is the solution. This would be an historical mistake, one which United
Nations Member States are not willing to make. The reason is straightforward: there is no need to choose
between health (drug control) and security (crime prevention). They are complementary, and not
contradictory commitments. Yet, because drug trafficking enriches criminals, destroys communities and
even threatens nations, it has to be dealt with urgently and forcefully. Policy change is required against
crime, not in favour of drugs.

Law enforcement has been prominent and largely successful in these efforts. Almost half of all cocaine and
about a quarter of all opiates produced annually are being seized world-wide (it is more difficult to measure
the situation with synthetic drugs and cannabis). These are respectable outcomes.

Yet, the drug control system has had its costs, and these are not limited to the public expenditure on supply
and demand reduction. International drug control has produced several unintended, yet costly consequences.
Among them, the most formidable collateral damage has been the creation of a lucrative black market for
controlled substances, dominated by powerful crime cartels and resulting in unprecedented violence and
corruption.

The origin and the mechanics of this drug-driven

crime phenomenon are easily understood. Drugs
are a commodity. Their scarcity – through controls
– boosts prices out of proportion to production
costs. Fear of the law and high value keep drugs
out of the hands of an untold number of potential
addicts. At the same time, they allow international
mafias to generate enormous profits, with almost
macroeconomic dimensions by attending those
who do use drugs. Criminal competition for the
drug markets is fierce, resulting in real wars on the
streets of many cities, worldwide. Profits are
ploughed back into increasing the capacity for
violence and into corrupting public officials.
Together, violence and corruption drive away
investment and undermine governance to the point that the rule of law itself becomes questionable. A
vicious circle is thus triggered, with lawlessness allowing even greater drug trafficking, with ever higher
proceeds abrading the social contract between society and its elected leaders.

Controlling both drugs and crime is a daunting task. The global drug trade was recently valued by UNODC
at $320 billion per year. While it probably remained stable over the recent past, it has now a virtually
macroeconomic dimension. If it were a country, it would be listed as the 21st economy in the world, right
after Sweden’s GNP of $358 billion. Put another way, it is greater than the world market for tobacco, wine,
beer, chocolate, coffee and tea combined, though smaller than the wholesale market for oil.

For heroin, the most dangerous drug, UNODC valued its global trade at $57 billion. Less than $2 billion of
this goes to the farmers, most of the rest (2/3) remains in the hands of professional criminals, insurgents and
terrorists (1/5 accrues to street retailers). This amount of money in sinister hands creates a dangerous
economic, political and even paramilitary leverage that buys the weapons, access and influence needed to
get the drugs to the market. The trade is so lucrative that those involved are willing to use deadly tactics to
deliver their deadly doses.

The wholesale market for cocaine represents more than 1/4 of the value of the entire trade. It is not
uncommon for multi-ton shipments of cocaine to be seized – and in recent years there have been dozens of
such seizures. A ton of cocaine is worth about $50-70 million dollars wholesale. While each consignment
has multiple delivery channels to ultimate users, there are a limited number of people who deal with cocaine
at this level. And many of these people belong to mafia families, whose identities are well established –
including their operational hierarchy.

In the instances where the academic debate has touched on this issue, drugs have been accorded interest as a
limited part of a broader discussion on the economic explanations of civil wars and the relationship between
natural resources and armed conflict. In particular, drugs have been included in subcategories such as
“lootable resources” together with i.a. diamonds. The results of this research have tended to show that
lootable resources, including drugs, have no link to conflict initiation, but that they are positively correlated
with conflict duration.1 The number of countries involved in large-scale production of opium and coca are
nevertheless low, and obtaining reliable data on drug cultivation and production across time and space
presents considerable difficulty. Consequently, these results remain tentative. But the suggested link raises a
number of important questions regarding the dynamics whereby narcotics and conflict interact, which are
presently not well understood. Existing research has contributed significantly to an understanding by
showing that lootable resources such as narcotics do not cause but lengthen conflict, but the specific
mechanisms whereby this takes place remain to be explained.

This article proposes to investigate this linkage by incorporating recent theory from the field of transnational
organized crime into the existing literature on civil war. It builds on the insights offered by recent
quantitative research, but its ambition is to investigate the causal mechanisms and dynamics linking
narcotics and conflict over time. In so doing, it seeks to trace these processes through a global survey of
drug-producing areas and selected deep case studies. The article finds that where traditional and limited drug
production exists, armed conflict tends to greatly increase the incidence of drug cultivation through the
collapse of state law enforcement capabilities in specific territorial areas, and to facilitate the processing of
finished products such as heroin and cocaine. Over time, insurgent groups tend to become increasingly
involved in the drug trade. Beginning with tolerating andtaxing the trade, insurgents tend to gradually shift
to more lucrative self-involvement. Self-involvement, in turn, generates a risk of affecting insurgent
motivational structures, tending to weaken ideological motivations and strengthen economic ones.

Narcotics and Conflict: Patterns of Incidence

The drug market is more than just some unsavoury characters making a lot of money: the same people can
actually destroy society. As West Africa has recently demonstrated, the effects of drug trafficking on human
security is devastating. Drug traffickers use their war-chests to attack vulnerable countries, through business
acquisitions, corruption and violence. These processes inevitably converge, as at stake is more than just
money-laundering and intimidation: drug cartels buy more than real estate, banks and business. They buy
elections, candidates and parties. In a word, they buy power. Here is where the drug business becomes a
security threat. Here is also where counter-narcotic measures dove-tail with security initiatives, as
underlined during the United Nations Security Council’s recent debates on the threat to stability in Africa
caused by drug trafficking.

Not only are drugs sourced from conflict-ridden regions of Asia and Latin America: they also fund and thus
perpetuate insurgency and related humanitarian disasters. Traffickers have far more resources than states in
poor and vulnerable transit areas like the Andes, Central America, the Caribbean, West Africa, the Balkans
and Central Asia. These regions are caught in a cross-fire that scares away tourists, business and investors
alike, making their socio-economic problems ever more intractable. Either more is done to help these areas
cope with the challenges posed by drug trafficking, or drug control will become even more stigmatized for
having created gargantuan problems in countries already facing dramatic poverty and health problems of
their own.

Evidence from the nine countries studied indicate no link between conflict initiation and narcotics
production, confirming the results of earlier research. In fact, the trend of the interaction is the same in all
four major drug-producing countries during the period (Afghanistan, Burma, Colombia, and Peru). In all
cases, traditional production of opium or coca had existed in a limited fashion long before the conflicts, and
no evidence suggests that onset of conflict was related to narcotics production. Nevertheless, narcotics
production in all cases grew considerably in the period succeeding the onset of conflict. Moreover, it was
transformed in many instances: heroin and cocaine processing over time tended to migrate into production
areas, and diversification also occurred, such as the introduction of opiates in Colombia and of synthetic
drugs in Burma. As regards conflict duration, the production of narcotics per se does not appear to be linked
to duration of conflict. However, the magnitude of narcotics production seems to bedirectly related to the
magnitude and duration of conflict. Minor producers also experienced only minor conflict if any; but the
four largest narcotics producers were also the countries involved in the longest and most protracted conflicts.
Only Bolivia couples significant production over time with absence of armed conflict, although peasant
unrest mainly geared toward the government’s coca eradication exists in the country. In all four major
producers, the large-scale or industrial production of drugs (and particularly the processing of cocaine or
heroin) developed after the initiation of conflict.

Colombia’s civil war has lasted for over three decades, but the country until 1996 produced less than 25
percent of world coca, becoming the largest producer only in 1997. This increase was to a significant extent
related to reductions in Peru’s production. In Peru, the outbreak of civil war after 1981 was followed by a
significant increase in coca cultivation, doubling from 1981–1982 to 1984–1985. In Burma, opium
production has been present since the late ninteenth century, flourishing in the independent-minded Shan
state since 1946. The country has been marred by various armed conflicts since the end of World War II, but
Burmabe came a major heroin exporter only in the 1970s. Likewise, Afghanistan was plunged into war with
the Soviet invasion in 1979, at which time less than 200 tons of opium were cultivated. Opium production
reached 1000 metric tons in 1988; and further increased in the civil war of 1990–1994, reaching 3416 tons in
1994. It remained high during the Taliban period, peaking at 4565 tons in 1999, before collapsing to 185
tons as a result of Taliban eradication in 2001. It then immediately resumed at 3400 tons in 2002 following
Operation Enduring Freedom and continued to expand in 2003 and 2004. Minor producers exhibit no
similarly clear pattern. Bolivia and Thailand experienced no armed conflict; Mexico and Pakistan
experienced minor conflicts unrelated geographically to the drug industry; and Laos suffered a low-intensity
conflict involving an opium-producing ethnic minority.

Hence the magnitude of drug cultivation appears linked to prolonged armed conflict. Armed conflict, in
other words, presently appears to be a prerequisite for the large-scale cultivation of opiates and coca, which
makes sense as these crops are being increasingly tightly controlled by the international narcotics control
regime. However, observations of temporal succession and on the concurrence of protracted conflict and
large-scale cultivation of narcotics do not permit far-reaching conclusions. The determining factor for both
could simply be state weakness: conceivably, states could manage to monitor and combat narcotics
production in low-intensity conflicts, whereas their ability to do so in protracted and intense armed conflict
would be harder. Causal links can tell us only so much; it is therefore necessary to specifically study
possible causal mechanisms. This requires the investigation of insurgent involvement.

Insurgent Involvement

There is strong empirical evidence for a link between insurgent groups and drug production. The link is most
obvious for large-scale producers, and less clear in the case of minor producers.51 Mexico’s Ejercito
Zapatista de Liberaci ´ on Nacional (EZLN), which fought a ´short conflict with the government in 1994, is
the only insurgent movement in the sample to have steered clear of involvement in the narcotics trade. It
could easily have boosted its financial capability by involvement in the drug trade, given the rampant drug
trafficking problem in Mexico, but chose not to do so. In the case of Pakistan, the armed conflict included in
the UCDP is the Mohajir Quami Movement (MQM), which was active in the Southern port city of Karachi
in the 1980s and 1990s. It is politically and geographically distinct from the Pashtun-populated opiate-
producing and processing areas in the Northwest. MQM factions are known to have been involved in
various forms of organized crime including drug smuggling in the export hub of Karachi, yet the
organization never involved in the cultivation of drugs. In Laos, the Hmong minority has waged a low-
intensity conflict against the communist government since it took power in 1975. Laos’s opium is cultivated
in the highlands inhabited by minorities, especially the Hmong. Opium production in Laos peaked in 1989–
1990, when an estimated 380 and 275 metric tons of opium were produced, respectively, coinciding with the
peak of the insurgency. These were the only years that the conflict was actually registered in the UCDP. An
organic link between the insurgency and opium cultivation has not been proven nor has the issue been
studied extensively. Nevertheless, connections between insurgents and traffickers have been noted and are
thought to help fund and sustain the insurgency.

If the picture is mixed and unclear as concerns minor producers, there is strong evidence of systematic and
most often direct involvement of insurgent actors in the cultivation and trafficking of narcotics in all cases of
major drug producers surveyed.

Probing the Drug–Conflict Linkage

The nine leading producers of coca and opium in 1990–2003 form the basis of an investigation that seeks to
provide a rough indication of whether the propositions outlined earlier are in fact a correct approximation of
reality. The low number of countries cultivating narcotics in significant amounts precludes statistically
reliable results; yet it is possible, through a methodology of process tracing, to consider whether the
propositions cited earlier stand up to closer scrutiny.

The interaction between protracted civil war and the cultivation and trafficking of narcotics is in fact
increasingly observable around the world. This is particularly the case regarding coca and opium, the crops
from which the most potent and profit-bringing psychotropic substances, cocaine and heroin, are produced.
Today, the bulk of the global cultivation of opium and coca is taking place in conflict zones, while the
trafficking of their derivatives has come to heavily involve insurgent and terrorist groups operating between
the source and destination areas of illicit drugs. This was not always the case: in the 1960s, countries such as
Turkey, Iran, and Bolivia produced much of the world’s opium and coca without experiencing armed
conflict. But presently, the production of these drugs is concentrated in Afghanistan, Burma, Colombia, and
Peru—four countries that have been ravaged by some of the world’s longest-lasting civil wars. This trend
raises important questions as to the reasons behind this phenomenon and its implications.

In the instances where the academic debate has touched on this issue, drugs have been accorded interest as a
limited part of a broader discussion on the economic explanations of civil wars and the relationship between
natural resources and armed conflict. In particular, drugs have been included in subcategories such as
“lootable resources” together with i.a. diamonds. The results of this research have tended to show that
lootable resources, including drugs, have no link to conflict initiation, but that they are positively correlated
with conflict duration.1 The number of countries involved in large-scale production of opium and coca are
nevertheless low, and obtaining reliable data on drug cultivation and production across time and space
presents considerable difficulty. Consequently, these results remain tentative. But the suggested link raises a
number of important questions regarding the dynamics whereby narcotics and conflict interact, which are
presently not well understood. Existing research has contributed significantly to an understanding by
showing that lootable resources such as narcotics do not cause but lengthen conflict, but the specific
mechanisms whereby this takes place remain to be explained.

The assumption in the literature is that lootable natural resources extend conflict by strengthening the
weaker party, normally the insurgent force, enabling it to escape defeat. But does the interaction between
narcotics and conflict alter the capabilities, cohesion, and motivations of parties to a conflict? Better
understanding the specific mechanisms of interaction between the drug industry and armed conflict would
provide important implications for prospects of conflict management and resolution. This article proposes to
investigate this linkage by incorporating recent theory from the field of transnational organized crime into
the existing literature on civil war. It builds on the insights offered by recent quantitative research, but its
ambition is to investigate the causal mechanisms and dynamics linking narcotics and conflict over time. In
so doing, it seeks to trace these processes through a global survey of drug-producing areas and selected deep
case studies. The article finds that where traditional and limited drug production exists, armed conflict tends
to greatly increase the incidence of drug cultivation through the collapse of state law enforcement
capabilities in specific territorial areas, and to facilitate the processing of finished products such as heroin
and cocaine. Over time, insurgent groups tend to become increasingly involved in the drug trade. Beginning
with tolerating and taxing the trade, insurgents tend to gradually shift to more lucrative self-involvement.
Self-involvement, in turn, generates a risk of affecting insurgent motivational structures, tending to weaken
ideological motivations and strengthen economic ones.

Natural Resources, Civil War, and the Crime–Rebellion Nexus

Traditional conflict theory has tended to focus on a “grievance” approach, seeing intra-state conflict as
emanating from movements seeking the redress of injustice, or from collective fear. Indeed, war has tended
to be portrayed as a result of “information failure”: the underlying assumption being that war benefits no one,
it must therefore be an out come that actors seek to avoid, hence an irrational decision. By contrast, a
number of emerging studies have focused on economic incentives as the driving force in intra-state conflict,

Greed or Grievance?

Paul Collier and his colleagues have argued that many civil wars are caused by economic rather than socio-
political factors, and by loot-seeking rather than by justice-seeking. As Collier and Hoeffler note, this
economic approach to understanding civil war differs from political science approaches by focusing on a
different motivation for violence—greed, not grievance—and a different explanation for the outbreak of war,
atypical opportunities and not atypical grievances. The economic approach focuses on the opportunities that
arise to belligerents, especially insurgents, during times of civil war. While war leads to great material losses
on a societal basis, this does not mean that “war is a disaster for almost everyone concerned.” As David
Keen argues, war is not simply the breakdown of order, economy, and social organization, but “the
emergence of an alternative system of profit, power, and even protection.” To put it simply, war has
functions for some actors. The insecurity and unpredictability of war, coupled with the breakdown or
weakening of law and order, implies the turn to a more opportunistic society; an increase in criminality; the
disruption of markets; and opportunities for what Collier calls “rent-seeking predation.”These consequences
are immensely detrimental for society at large, but provide specific opportunities for armed groups to reap
significant economic benefits: some people manage to do well out of war.

This so-called greed theory of civil conflict has nevertheless been criticized as simplistic and not holding up
to closer scrutiny, especially as regards the onset of conflict. Empirical research has argued that few if any
conflicts have been initiated only or mainly as a result of economic incentives. An influential study argued
that “combatants’ incentives for self-enrichment and/or opportunities for insurgent mobilization created by
access to natural and financial resources were neither the primary nor the sole cause of the separatist and
non-separatist conflicts analyzed’. Likewise, in a summary of the findings of 14 cross-national econometric
studies of resources and conflict, Michael Ross concluded that “there appears to be little agreement on the
validity of the resources-civil war correlation.” Indeed, there is strong disagreement on whether natural
resources at all increase the risk of war. As Ross argues, these inconclusive results are likely the result of
differing methodologies and differing data.

The Crime–Rebellion Nexus

These studies suggest a causal link between narcotics and enduring conflict. They do not, however, explain
convincingly why this should be the case. The basic inference is that the presence of narcotics increases the
capabilities of insurgents. But is this the entire story? Increased capabilities could be conceived to imply a
greater possibility for a negotiated solution in protracted conflict, once both parties realize that there is little
possibility of victory—William Zartman’s “hurting stalemate,” Why, then, should conflicts involving
narcotics be so intractable? Recently emerging theory from the field of organized crime is helpful in
suggesting an answer to this missing dimension.

Studies in the late 1990s observed a globally increasing linkage between organized crime and violent non-
state actors, in particular terrorist groups. This term was initially coined by Makarenko for the study of
terrorist organizations, but is equally applicable to regular insurgencies. For the purposes of this article, the
term “crime–rebellion nexus” is therefore more appropriate. The crime–rebellion nexus refers to an
increasing confluence of groups originally espousing either political or criminal motivations. Ideologically
and criminally motivated groups have traditionally been seen as forming opposing ideal types of armed
groupings. The ideal type of groups that challenge state authority with violent means in the pursuit of a
political goal is one of striving for a self-defined higher cause. Such groups are therefore traditionally
understood as being disinterested in—or even principally opposed to—the pursuit of profit through
organized crime, including drug trafficking. Transnational criminal networks, on the other hand, are
motivated simply by the pursuit of monetary profit and status. Clearly, their interests may be more than
simply economic because money is not necessarily an end in itself but a means to achieve status, influence,
security, and even territorial control. Nevertheless, as Phil Williams noted, they are “economic rather than
political organizations, [and therefore] do not pose the same kind of overt or obvious challenge to states that
terrorist groups do.” Their primary aim, unlike terrorist or insurgent movements, is not to directly challenge
the state.

Studies in the late 1990s observed a globally increasing linkage between organized crime and violent non-
state actors, in particular terrorist groups. This term was initially coined by Makarenko for the study of
terrorist organizations but is equally applicable to regular insurgencies. For the purposes of this article, the
term “crime–rebellion nexus” is therefore more appropriate. The crime–rebellion nexus refers to an
increasing confluence of groups originally espousing either political or criminal motivations. Ideologically
and criminally motivated groups have traditionally been seen as forming opposing ideal types
of armed groupings. The ideal type of groups that challenge state authority with violent means in the pursuit
of a political goal is one of striving for a self-defined higher cause. Such groups are therefore traditionally
understood as being disinterested in—or even principally opposed to—the pursuit of profit through
organized crime, including drug trafficking. Transnational criminal networks, on the other hand, are
motivated simply by the pursuit of monetary profit and status. Clearly, their interests may be more than
simply economic because money is not necessarily an end in itself but a means to achieve status, influence,
security, and even territorial control. Nevertheless, as Phil Williams noted, they are “economic rather than
political organizations, [and therefore] do not pose the same kind of overt or obvious challenge to states that
terrorist groups do.” Their primary aim, unlike terrorist or insurgent movements, is not to directly challenge
the state.

This traditional division into mutually exclusive ideological and criminal ideal types lies at the basis of the
academic division between political science and criminology, as well as bureaucratic divisions between law
enforcement and national security. As Williams noted, the perception is that “crime is a domestic problem;
and law enforcement and national security are based on very different philosophies, organizational structures
and legal frameworks.” As a result, transnational organized crime has not been viewed as a national, let
alone international, security issue. This view has nevertheless become increasingly misleading, as the
observable situation has changed. As Thachuk observed, organized crime groups traditionally “rarely co-
operated with terrorist groups, or engaged in their activities, as their goals were most often at odds . . . many
of today’s terrorist groups have not only lost some of their more comprehensible ideals, but are increasingly
turning to smuggling and other criminal activities to fund their operations.”
The interaction between criminal and political groups is therefore presently best conceptualized as a
continuum rather than as separate phenomena. In this respect, Makarenko’s analytical construct of a security
continuum that places pure organized crime at one end of the spectrum and pure ideological groups at the
other is particularly useful. It shows the wide variety of possible interactions between criminal and political
groups. Between the two ideal types, the continuum allows for a “gray area” where different variations and
combinations of the two exists. Interactions between organized crime and ideological struggle can take place
either through cooperation between criminal and ideological groups; or through the involvement of an
ideological group in crime or vice versa, as suggested in the crime–rebellion continuum.

Research has suggested that the practice of cooperation between groups at opposing ends of the spectrum
tends to give way to self-involvement—mainly due to the lack of trust between groups, and the greater
profitability of self-involvement. If the need for sources of finance forms the first impetus for the
involvement of politically motivated groups with organized crime, such involvement also tends to affect the
motivational structures of originally ideologically motivated groups. Once involved in crime, groups

can continue to further their original interests—but crime can also become an end in itself. Particularly in
protracted conflicts, entire groups or parts of groups come to shift their focus increasingly toward the
objective of profit. That is, the organization or movement either gradually shifts its nature to a
predominantly criminal one, or acquires a criminal nature at the side of its ideological nature. Indeed, some
groups are found in a situation where “organized crime and terrorism are indistinguishable from one another.”
Profit through crime, often specifically the drug trade, becomes a motivation in its own right for the
existence and cohesion of the movement.

An added value of the continuum model is that it allows for the movement of groups across this continuum
over time, enabling the tracking of the evolution of a group’s involvement in crime as well as of its
motivational structures. Clearly, this issue is relevant not only for drug production or transit states but for
insurgent/terrorist groups in the developed world as well—the Provisional Irish Republican Army being
only one example of a movement appearing to be affected by this phenomenon.

Implications

Involvement in crime can be seen as fundamentally changing the equation of an armed group’s relationship
to state and society. Whether or not its motivations are affected, crime enriches the group and its leaders,
enabling the acquisition of more sophisticated weapons, the employment of more fighters, the corruption of
state officials, and the better propagation of group ideology to the population. Hence crime and its proceeds
makes the group a more dangerous adversary to the government, and often results in a further weakening of
the state—particularly if it enables insurgents to assert territorial control over parts of the state’s territory
that is usable for criminal activities. In this sense, crime and drugs are instrumental in enabling a group to
threaten the security of the state at its very foundation—the monopoly of the use of force and control over
territory.

The debate on natural resources and armed conflict does not significantly address the possibility of
motivational change in insurgent groups. In fact, the literature generally takes a “snapshot” of a group,
considering it either motivated by greed or by grievance, but does not consider the possibility of motivations
changing over time. Indeed, the crime–rebellion nexus offers the possibility that insurgents may initially be
motivated by grievance, but that the opportunity of economic profit in the course of conflict can change both
the group’s financial condition as well as its motivational structure. This in turn affects the evolution of
the conflict, the development of the group itself, and the prospects of various measures of conflict resolution.
Indeed, asserting whether an insurgent group has gone through significant changes in motivation will have
important implications for ways to handle the group. Simply put, offering redress to the stated grievances of
an insurgent group will do little to end the conflict in case the group has changed its primary motivation to
the criminal. Indeed, in such cases, the very proposition of political compromises, including offers of power-
sharing or regional autonomy could be misplaced as the insurgent groups have developed an interest in the
continuation of conflict. A traditional, grievance-based understanding of the conflict would hence be likely
to lead negotiators in the wrong direction.

Conditions for the Crime-Rebellion Nexus

The crime–rebellion nexus can operate with any form of organized crime, but the specific case of illicit
drugs stands out for a number of reasons. First, they are immensely profitable, especially in processed
form—few if any resources can compare in terms of profit margin. Second, they are renewable: “looting” is
a misnomer for the cultivation of drugs, because the same plant can be continuously cultivated year after
year, bringing continuous profit. Third, they are illegal: a strong international moral and legal regime
outlaws the large-scale cultivation of drugs with very specific and controlled exceptions. As a result, more
than any other activity including the sale of diamonds, weapons, timber, or oil, the drug industry requires
territories outside state control.

Yet the crime–rebellion nexus is only likely to occur, as far as drugs are concerned, under certain conditions.
Armed conflict and its consequences, such as the collapse of law enforcement and the loss of state control
over territory, forms an impetus for the rise of organized crime and drug cultivation. But this option may not
be present in all conflict areas. Drug cultivation is a relatively complicated process, connected with risk
(most obviously eradication) and in most societies, attached to negative stigma. It is not technologically
advanced, but does require certain skills. Opium cultivation, for example, is a complex, labour-intensive
occupation, with many natural hazards. The skills required can be transferred, but the very need for them
makes drug cultivation likely to take place only where a previous tradition of cultivation of narcotic plants
exists. This is all the more the case because such a tradition implies the existence of mechanisms to market
the products onward toward consumer markets. In the absence of cultivation tradition and market outlets,
armed conflict may still generate organized crime, but in other forms, involving other commodities
including synthetic drugs.

In sum, few conflict zones experience drug production, but conflict and drug cultivation are still very likely
to occur in the same place. Fifteen of 109 intra-state armed conflicts (13.7 percent) recorded by the Uppsala
Conflict Data Project (UCDP) in 1990–2003 took place in the 9 states out of a total of 190 (4.7 percent) that
are drug-producing.38 Of these 9 states producing opium or coca in significant quantities in 1990–2003, 6
experienced armed conflict. In other words, 13.7 percent of conflicts took place in the 4.7 percent of states
that produce opium and coca.
 Political instability is a driver resulting in the increased convergence/cooperation of terrorist and
criminal organizations. –  Illicit transnational networks pose a threat to political stability, capitalizing
on it where it already exists.
 Democratic participation, or lack thereof, plays a significant role in the success of terrorist and
criminal groups and their potential for convergence.– The absence of a democratic process, which
encompasses a system in which citizens feel a lack of trust in their ability to legitimately and fairly
select leadership, increases the likelihood of a group’s ability to influence a region.
 Increase in disenfranchised members of society increases the recruitment pool for both organized
crime and terrorist groups and increases the potential for influence and coordination.– 
Unemployment / underemployment, resource scarcity, demographic shifts, and migration all could
increase the desire for the two types of groups to work together
This is not surprising because both the inherent political and economic consequences of armed conflict tend
to generate conditions suitable for drug cultivation. In political terms, the weakness of the rule of law
increases the opportunities for drug production. In economic terms, armed conflict generates considerable
economic disruptions and curtails trade, thereby impoverishing people, increasing the likelihood of people
needing to turn to the production of narcotics for survival. Still, armed conflict is likely to generate large-
scale narcotics production only where it provides a profitable economic alternative to the producer, that is,
where the lack of licit economic alternatives make drug production an attractive option. It is hence most
likely in economically marginal, isolated, and rural inaccessible areas far from centres of population, where
economic alternatives are few and the risk of eradication lower. Moreover, the inherent characteristics of
opium and coca both require a certain altitude to grow well,

Insurgent groups seeking sources of finances are likely to turn to narcotics only if that option is preferable to
alternative modes of financing, which could include external support from states or diasporas, extortion of
civilians, the exploitation of other natural resources, or other forms of smuggling or organized crime. If a
diamond mine exists in their vicinity but no drugs are cultivated in the area, insurgents would rather seek to
appropriate control over the diamonds than to train and force farmers to grow opium or coca. It is
opportunity that makes insurgent groups turn to drugs.

The link between narcotics and conflict is plausible in both conflicts over territory and conflicts over
government, but is likely to have different dynamics. In separatist wars, insurgents are tied to a specific
territory, and hence have little choice of terrain or theatre of operations. They can protect local drug
production to bolster legitimacy; and in a protracted conflict with control over territory, encourage drug
production. In a conflict over government, however, insurgents have a greater potential to choose their
theatre of operations across the country, and a choice whether to press for territorial control over specific
areas. This provides greater flexibility in selecting areas of drug production. Moreover, protecting drug
cultivation would in these situations likely play a bigger role for building popular legitimacy, as rebels may
have less inherent popular support than insurgents struggling for ethnic rights.

Propositions

On the basis of findings of research on the natural resources and armed conflict, and the crime–rebellion
nexus, a number of propositions for the relationship between drug cultivation and conflict can be inferred: -

 The origins of conflict are based on grievance and not greed. Drug production is not a cause of
conflict.
 The conditions of armed conflict provide an impetus for organized criminal activity and tend to
generate an increase in drug production if a previous growing tradition exists.
 Growing drug production forms, a strong incentive for insurgent groups to involve in drug
production to reap profits from the drug trade. This involvement tends to go from alliance with or
taxing of producers to direct involvement.
 Once involved in the drug trade, insurgent groups tend to see their motivational structures affected,
with elements of the group acquiring an economic motivation that compounds or supplants the
ideological one.

Government Corruption

In recent decades, greater attention has been paid to the capacity of organized crime to corrupt political
systems, chiefly by pouring illicit money into political campaigns and institutions. Conflict and weak
governance enable such networks to engage in political corruption. If not properly addressed, the increasing
number and intensity of global conflicts and the democratic backsliding seen in recent years are likely to
negatively affect efforts to tackle political corruption linked to organized crime.

Democracy is never perfect but exists on a spectrum and in a variety of forms. While each context is specific,
there are some commonalities between states that share similar socioeconomic conditions, conflict dynamics
or historical experiences. For example, in postcolonial states, democratic systems are often inherited and
reflect the administrative structures of colonialism, which used politics to maintain power. In situations
where there is little expectation of accountability among citizens, the mechanisms to support it are often
lacking even where the political will exists. Civil society plays an important role as both a watchdog and an
advocate of democratic principles. Building the capacity of civil society organizations and increasing
finance to those that monitor corruption and human rights in particular could help hold public officials to
account and bring about a cultural shift that stigmatizes corruption. Participants also discussed how greater
support for programmes that promote media independence and freedom of speech, and those that educate
journalists on how to responsibly monitor and report on corruption might be effective in certain contexts

Democratic backsliding can also be the result of a lack of trust in political institutions. The latter is
frequently linked to changes in the state- society relationship, which may weaken over time as a result of
corruption, weak governance, limited access to justice, low levels of social cohesion or poor service delivery.
While good governance does not ensure an absence of organized crime, poor governance creates
opportunities for it to flourish. Ungoverned spaces, corruption and weak rule of law enable organized crime
to finance and develop its operations. The informal and illicit markets that emerge in the absence of a strong
formal sector can provide livelihoods in the short term but empower criminal networks and undermine state
authority in the medium to long term. Increasing conflict and conflict recurrence can exacerbate the above-
mentioned challenges and create new ones. For example, when the proportion of public resources directed
towards military operations increases, other sectors such as health care, education, security and justice may
suffer cutbacks resulting in a reduction in the quality or quantity of services provided. In such instances the
void created can be filled by nonstate actors such as community and faith-based organizations, humanitarian
or development actors, insurgent groups or local militias. While the delivery of services by nonstate actors
can have positive impacts on the local population, it can also undermine state legitimacy and contribute to
greater instability, particularly if the nonstate actors delivering services have political objectives or are
otherwise profiting from the conflict. Moreover, during times of conflict involving high levels of
displacement, organized crime networks may benefit from human trafficking or profit from selling arms to
and financing the parties to the conflict—whether state and nonstate actors—using money earned through
drug smuggling

Compounding ample evidence of insurgent involvement in the drug industry, equally substantial evidence
shows that governments and especially their proxy militias have become systematically implicated in the
drug trade. This is an important element in understanding the drug–conflict linkage. Corruption of
government authorities, including political as well as military bodies, first of all decreases their efficiency.
Hence if the drug industry tends to strengthen insurgents, it has the opposite effect on governments—thereby
strengthening what is in most cases the weaker side and weakening the stronger one. Moreover, government
officials’ involvement in the drug trade is likely to be easier and accountability lower in times of armed
conflict. This, and the fact that conditions of armed conflict themselves enable the production of drugs,
likely entails that individuals in government acquire a personal interest in the continuation of a conflict
situation—if not necessarily war, then at least the absence of peace.

Afghanistan stands out as a country with a collapsed state, which enabled successive insurgent formations to
control state authority. In this sense, talking about an Afghan state from 1989 to 2004 is relatively
meaningless. That said, successive militia groups with ties to the drug industry have succeeded each other in
nominal or actual control of the state, leading to entrenching criminal involvement of government officials.
This is a major impediment to the building of the Afghan state.

In all drug-producing countries, there is a comprehensive body of evidence implicating governments, at the
highest levels—including occasionally heads of state—in corruption by, or collusion with, the narcotics
industry. In Colombia, aside from 35 percent of members of the country’s Congress being implicated with
the drug trade in the early 1990s, former President Ernesto Samper was found to have financed his election
campaign with funds provided by cocaine cartels. In Peru, military authorities have been widely implicated
in facilitating drug trafficking. All producer states, including those without armed conflict, as well as
numerous transit countries, have been implicated by what David Jordan calls “Narcostatization."

Burma stands out as a country whose government has been especially lax toward drug production and
trafficking. Several leading members of the ruling military council have been connected to the drug trade,
but beyond this, the state explicitly made tolerance of the drug business a bargaining chip in negotiations
with rebel groups. In Burma, hence, the involvement of both sides in the drug trade interestingly helped
reduce the intensity of armed conflict.

THE DRUG PROBLEM AND CORRUPTION

The drug problem and corruption have a mutually reinforcing relationship. Corruption facilitates the
production and trafficking of illegal drugs and this, in turn, benefits corruption. The wealth and power of
some drug trafficking organizations can exceed that of local
governments, allowing them to buy protection from law
enforcement agents, criminal justice institutions, politicians
and the business sector. In doing so, they further reinforce
corruption. The rule of law is both an immediate victim and,
if it is already weak, an underlying factor that feeds this cycle.

Despite this, there have been few attempts to get to grips with
the relationship between the drug problem and corruption.
Previous studies focused on specific events or geographical
areas, but they have rarely taken a wider approach or tried to
identify elements of the relationship across the whole illicit
drug market. Better understanding of this relationship is vital
not only to combat the illicit drug trade, but also to reduce
corruption.

1. Importance of assessing levels of corruption

The Cosa Nostra and ‘Ndrangheta have long benefited from

high-level political connections in Italy. In a similar way,
some Mexican drug cartels allegedly benefited from
protection from local police and local politicians. In Guinea
Bissau, international drug traffickers counted on the support
of influential segments within the political and military
apparatus for a number of years. This kind of activity is often
called high-level corruption. It involves a small number of
senior officials in the government, police, customs or the
justice system being targeted in a business transaction with
bribes in exchange for either passive or active support
facilitating illegal activities. In several cases high-level corruption has posed a threat to the State. Organized
criminal groups have attempted to influence the outcome of democratic processes; for example, by funding
election campaigns in favour of specific candidates or political parties through “vote buying”, intimidation
or corrupting participants in the political process. Moreover, a corrupted judicial system and a lack of prison
governance results in relative impunity.

By contrast, in the European Union much of the corruption reported appears to be on a low level, according
to research by Europol. Political corruption at the level
of elected national representatives or agency heads
appears to be rare. However, Europol found that
corruption of city councillors, mayors and other local
level politicians was more common, especially in
cities along the European Union’s eastern land
border.81 Overall, Europol concluded that organized
crime groups involved in drug trafficking in Europe
rely on corruption to facilitate their trafficking
activities.

Organised crime is sometimes associated with

violence, even with warlike forms of violence. But
there is no strong correlation between organised
criminal activities and violence. Measures of stability
and relatively low levels of violence can be compatible
with huge high-value criminal operations, such as
transnational drug trafficking and oil theft on an
industrial scale. Such “stability” in crime-permeated environments may be due to the existence of state or
elite sponsored protection rackets and effective corruption rings. But it may also arise from other types of
(local) governance arrangements and agreements involving both criminal organisations and legitimate
political, economic and social groups.

The impact of high and low level corruption on local drug consumption and levels of violence is not always
evident. The relationship with violence is neither straightforward, nor well understood. Violence is not
always a direct outcome of drug trafficking, as demonstrated by the very different levels of violence
registered worldwide in key transit or manufacturing countries. Whether more corruption means more or
less violence is equally context specific. Depending on the underlying purpose of a bribe, the consequences
may be different. Corruption is typically associated with weakened institutions; and weakened law
enforcement bodies are by definition less capable of containing violent crime. In certain environments a
corrupt equilibrium may temporarily create the impression of reduced violence; however, the negative
effects of corruption in general become evident in the long run.

2. Corruption along the drug supply chain

For criminal organizations, the expected results of corrupting a public sector organization vary depending on
the agency involved. For example, a criminal organization may seek to corrupt a customs officer to smooth
the passage of drugs — by looking the other way when a shipment is passing or by informing traffickers of
checks. Police may be targeted to obtain inside information on planned operations in order to protect
ongoing illegal activities. Judges and prosecutors could be bribed or otherwise influenced to undermine
police investigations, influence witnesses, reduce sentences or provide special prison treatment.

Different factors may affect the level of vulnerability of an institution. For example, if law enforcement
officials and magistrates are paid barely enough to provide for their households or believe they are treated
unfairly, they may be more vulnerable to bribes. Indeed, research suggests that an official’s perception of
how he or she is treated may have a greater effect on the organizational culture of integrity than the size of
remuneration itself. Other important factors include the existence of effective internal control mechanisms,
a strong organizational culture of ethics, or the presence of transparency and accountability mechanisms that
help to promote public trust.

3. Prosperity, corruption and drug markets

The connection between corruption and economic development is often portrayed as asymmetrical: the
lower the level of development, the greater the corruption. While there is evidence that this is true for
bribery and other forms of low-level corruption, less is known about high level corruption in general. Less
advanced economies may not have the abundance of public resources available to build up strong
institutions resilient to corruption, yet corruption itself will impede the process of generating, collecting and
allocating such resources. Corruption and related forms of crime such as extortion discourage investment,
entrepreneurship and business formation (which have prerequisites such as the rule of law and procedural
transparency) and ultimately may be responsible for the hindrance of prosperity and economic development.

More broadly, World Bank research suggests that corruption entrenches poverty by discouraging foreign
investment. This becomes even more pronounced if a country begins to develop a narco-economy; foreign
businesses may decide to pull investment once they find out that the justice system. does not work any
longer, correspondent banks close down as money laundering risks become too high, and potential investors
steer clear because they fear their international image might suffer. All of this leads to lower levels of
investment and growth, and a decline in some productive sectors of the economy.
In situations like that, local authorities may pay less attention to the origin of investment funds and accept
criminal finance to fill the void. Moreover, corruption negatively affects business by raising transaction
costs, which reduces investors’ competitiveness and leads to a poorer financial performance overall. Studies
confirm the relationship between development and bribery levels. As figure 4 shows, when the prevalence of
bribery experienced by individuals in their dealings with public officials is analysed, it suggests that the
police and the judiciary are the sectors most likely to be bribed in countries with low economic development.
According to research by the International Monetary Fund (IMF), corruption also increases the level of
income inequality. This process particularly affects the poorer members of society, who can expect their
income growth to be reduced and the likelihood of poverty to increase. Higher levels of income inequality
are also known to provoke drug trafficking and corruption. In fact, the drug industry may perpetuate and
exacerbate income inequality, which may in turn cause the expansion of drug production and trafficking. In
unequal societies, members of marginalized groups may view corruption and involvement in criminal
organizations as a viable way to improve their lives.

Organised crime promotes “non-development” across four distinct dimensions:

 Economic: Huge proceeds from illicit and criminal activities are siphoned away from the legitimate
economy, and lawful markets are distorted.
 Political and governance: Organised crime alters the political economy of developing countries, as
illegal-criminal interests that span the public–private divide and involve non-state and state actors
transform economic, political and social institutions.
 Social: The social cohesion of communities and societies is fractured as criminal subcultures emerge
and replace traditional values and norms.
 (Human) security: The security of both citizens and states is endangered by organised crime
Overall, corruption enables the growth of the illicit economy, which includes the illicit drug trade and many
other illegal activities, such as trafficking in cigarettes, persons, guns or counterfeit goods. A study for the
European Union showed that levels of corruption and organized crime activities were highly correlated.98
This was particularly true for the illicit drug trade; the only criminal activity that benefited more from
corruption was prostitution.

4. Economic impact of drug money

The flow of drug money from the hands of traffickers,

through launderers, and finally into the licit economy, has all
sorts of complex socioeconomic effects.

In the short term, an inflow of drug money back into the

economy can boost investment and local GDP, generating
employment and revenue. The long-term effects, however,
tend to be negative, particularly when drug-related proceeds
comprise a relatively larger portion of the total economy of a
community or a country. In this scenario, drug money has the
potential to inflate property prices, distort export figures,
create unfair competition, reinforce skewed income and
wealth distributions, and increase corruption. In the process,
legitimate businesses, without access to illicit funds, may be
squeezed out of the market, and new legitimate
investments may not take place. The rise of an illicit
economy helps to weaken the rule of law and facilitates
corruption, which in turn reinforces the vicious economic
cycle.

When large amounts of illicit funds are available in an

economy, criminally financed entities may take over some
lending functions. In cases like those, government actions
designed to stop economies from overheating, such as
enforcing a restrictive monetary policy, may not work. This
may prompt even more drastic monetary and fiscal measures. Money laundering can lead to volatility in
exchange rates and interest rates owing to unanticipated inflows and outflows of capital, all of which tends
to have a negative impact on overall economic growth. Studies suggest that the flow of laundered money,
including drug proceeds, back into the domestic economy is associated with reductions in overall annual
economic growth rates, particularly in smaller and less developed countries. One estimate, based on a study
of 17 OECD countries, suggested that a $1 billion increase in money laundering can reduce overall
economic growth by between 0.03 and 0.06 percentage points.

Several tax havens around the globe have been involved in money laundering activities — actively or
unwittingly — and seem to have thrived economically, having witnessed an expansion in their financial
service sectors. But international tolerance towards such behaviour is wearing thin, and calls have been
made to develop strategies to prevent and combat all illicit financial flows. Financial centres that do not
adhere to international rules and regulations face legal sanctions and may eventually lose access to global
financial markets, which could have potentially negative consequences for their own economic stability.
Organised crime poses serious challenges for development. Rather than “development in reverse”,
organised criminal activities promote what could be called non-development. Illegal and criminal
interests that span the public–private divide and involve non-state and state actors upend, transform and
reconfigure the rules of the game—that is, the institutions that govern the economic, political and social
affairs of societies and states and the prevailing distribution of power and wealth. Legality and formal
institutions do not normally collapse entirely under the pressure of organised crime, and governments are
fighting organised criminal groups and networks. Yet in the past two to three decades organised crime has
spread across the globe, particularly affecting developing countries and fragile states. In this vast process,
illicit markets have multiplied; criminal operations have become ever more globally networked; huge
proceeds from criminal activities are siphoned away from the legitimate economy and lawful markets are
distorted. The political economy of crime-affected developing countries is altered significantly. Social
cohesion is fractured as criminal subcultures emerge and replace traditional values and norms, and the
security of both citizens and states is endangered.

Depending on several factors, such as the type of illegal-criminal activity involved and the degree and nature
of state fragility in a given country, organised crime can be associated with violence, sometimes even with
war-like “new” forms of violence, such as in the 2000s in the Niger Delta of Nigeria and currently in
Mexico.

However, we cannot assume that organised crime always leads to violence and instability. For instance, the
cases of Afghanistan, Myanmar and the Niger Delta of Nigeria reveal that a measure of stability and
relatively low levels of violence can be compatible with huge high-value criminal operations, such as
transnational drug trafficking and oil theft on an industrial scale. Such “stability” in crime-permeated
environments may be due to the existence of state or elite sponsored protection rackets and effective
corruption rings. But it may also arise from other types of (local) governance arrangements and agreements
involving both criminal organisations and legitimate political, economic and social groups, such as in the
favelas of Rio de Janeiro.

This analysis reveals that it is not appropriate and useful anymore, if ever it was, to conceive of organised
crime as some sort of “alien” threat that is external to states, licit markets and legitimate, law-abiding society.
The alternative framing of organised crime as a development challenge used in this Topic Guide aims to
help analysts and policy-makers overcome a bias towards prioritising law enforcement and security
interventions when tackling problems that stem from organised criminal activities.

Evidence that law enforcement and organised crime control policies are effective is scant at best. Arguably,
such approaches are even less promising and useful in developing countries, where states typically do not
have sufficient law enforcement capacity and do not hold the monopoly on the use of force. Things are
complicated further because in such settings the rule of law is weak or non-existent, corruption and human
rights violations are rife, and political and social institutions, both formal and informal, are not separated by
the membrane of legality from organised criminal activities. Wider society—affected by rampant
inequalities in income and well-being—may not even consider such activities illegitimate.

KEY FINDINGS
This so far we have seen that Compounding ample evidence of insurgent involvement in the drug
industry, equally substantial evidence shows that governments and especially their proxy militias have
become systematically implicated in the drug trade. This is an important element in understanding the drug–
conflict linkage. Corruption of government authorities, including political as well as military bodies, first of
all decreases their efficiency. Hence if the drug industry tends to strengthen insurgents, it has the opposite
effect on governments—thereby strengthening what is in most cases the weaker side and weakening the
stronger one. Moreover, government officials’ involvement in the drug trade is likely to be easier and
accountability lower in times of armed conflict. This, and the fact that conditions of armed conflict
themselves enable the production of drugs, likely entails that individuals in government acquire a personal
interest in the continuation of a conflict situation—if not necessarily war, then at least the absence of peace.

Afghanistan stands out as a country with a collapsed state, which enabled successive insurgent formations to
control state authority. In this sense, talking about an Afghan state from 1989 to 2004 is relatively
meaningless. That said, successive militia groups with ties to the drug industry have succeeded each other in
nominal or actual control of the state, leading to entrenching criminal involvement of government officials.

Moreover, the link between narcotics and conflict also has the potential to affect the motivational structures
of insurgent groups, creating an economic function of war for actors on both sides of the conflict. The
specific implications of this for conflict resolution nevertheless remain to be studied. As the Burmese case
indicates, interests on the part both of the government and insurgents in the drug trade could be a factor
leading to reduction of warfare. This may not necessarily be inspiring, if it means that conflicts involving
large-scale narcotics production can be ended through the creation of weak narco-states.

The findings of this study indicate that the interaction between narcotics production and armed conflict is
considerably more complex than visible at first glance. The effect of the drug trade on capabilities and
motivational structure of parties to armed conflict has important implications for efforts to resolve these
conflicts. For example, the Colombian government’s decision to grant the FARC control over an area the
size of Switzerland in 1998 would have been a very doubtful proposition if the criminal nature of the FARC
had been fully understood; indeed, the move did nothing to solve the conflict, while the ceded territory
quickly developed into a safe haven for various criminal activities. This example suggests the importance a
correct analysis of insurgent group characteristics has for mediation and negotiation strategies. In sum, the
type and level of involvement of an insurgent group in criminal activity is an increasingly important element
in understanding the dynamics of armed conflict and in devising strategies to address, manage, and resolve
these conflicts.

1. Organized crime groups branch out: -Organized crime groups have widened their portfolio of illicit
activities. New crime areas such as cybercrime and environmental crime have emerged. Fewer
groups are exclusively dedicated to drug trafficking, while more are also operating in other illicit
sectors. Almost two thirds of drug trafficking groups operating in countries in the European Union
are involved in more than one crime area, according to research by the European Police Office
(Europol), and that figure has been rising for years. Drug trafficking groups in Europe are frequently
also involved in the counterfeiting of goods, trafficking in human beings, smuggling of migrants and
trafficking in weapons.
2. Continued importance of drugs to organized crime groups: - In 2014, transnational organized crime
groups across the globe were estimated to have generated between approximately one fifth and one
third of their revenues from drug sales. Europol identified some 5,000 international organized crime
groups operating in countries of the European Union in 2017 and estimated that more than one third
were involved in drug trafficking. This makes drug trafficking more widespread across organized
 crime than organized property crime, smuggling of migrants, trafficking in human beings, excise
fraud or any other illicit activity.
3. Drug trafficking no longer the preserve of large criminal groups: -Groups with a strong hierarchical
structure, such as those in Mexico and Japan, and to some extent in the Russian Federation, continue
to be involved in the drug trade. Hierarchical, top-down organizations are still the most widespread
type of organized crime group in Europe, according to Europol. However, there is evidence that
looser, horizontal networks are becoming increasingly significant. In 2017, Europol estimated that
such networks accounted for 30-40 per cent of organized crime groups operating in countries in the
European Union.
4. Technology’s role in creating relatively low-risk drug markets: -The mobile communications
revolution has offered new opportunities to traffickers. They no longer need personal contact with
clients; instead, low-level "runners” can collect cash and dealers can let the customer know where to
collect their drugs using messages sent over encrypted networks. The dark net allows users to buy
drugs with a crypto currency, such as bitcoin, and have their purchases delivered to them in a
concealed manner. Typical buyers are recreational users of cannabis, “ecstasy", cocaine,
hallucinogens and NPS. They are less likely to order heroin or methamphetamine. Although the dark
net accounts for only a small percentage of drug sales, the market has been growing rapidly in recent
years.
5. About 30 per cent of cocaine proceeds contributes to illicit financial flows: -About 30 per cent of the
proceeds of cocaine sales at the global level was laundered abroad in 2009, according to a model
developed by UNODC. A 2016 study based on interviews with drug crime convicts in Italy came to
a similar conclusion, suggesting that roughly one third of the money spent by cocaine users was
being laundered across borders.
6. Drug money can make countries poorer: -In the short term, an inflow of drug money can
boost investment and local gross domestic product. But the long-term effects tend to be negative,
particularly when drug-related proceeds comprise a sizeable portion of the total economy of a
community or a country. In this scenario, drug money has the potential to inflate property prices,
distort export figures, create unfair competition, reinforce skewed income and wealth distributions
and increase corruption. In the process, legitimate businesses, without access to illicit funds, may be
squeezed out of the market and new legitimate investments may not take place. The rise of an illicit
economy helps to weaken the rule of law and facilitates corruption, which in turn reinforces the illicit
drug sector. Studies suggest that an injection of laundered money, including from illicit drug
activities, is associated with reductions in overall annual economic growth rates, particularly in
smaller and less developed countries. One estimate, based on a study of 17 countries of the
Organization for Economic Cooperation and Development, suggests that a $1 billion increase in
money-laundering could reduce overall economic growth by between 0.03 and 0.06 percentage
points.
7. Corruption exists all along the drug supply chain: -At each stage of the drug supply chain, there are
opportunities for corruption. At the production level, farmers may bribe eradication teams, producers
may bribe judges and police officers, and manufacturers may exploit workers in chemical companies
in order to get hold of precursor chemicals. Further down the chain, traffickers bribe customs
officials and take advantage of weaknesses in transport firms. At the consumer level, users can get
drugs through corrupt doctors and pharmacists.
8. Corruption, the illicit drug trade and poverty reinforce each other: -Corruption entrenches poverty
by discouraging foreign investment, according to World Bank research. In a narco-economy, this is
doubly true. Foreign firms, seeing the corrupted justice system and pervasive money-laundering that
characterize narco-economies, are unlikely to make or increase investments. Corruption also
increases the level of income inequality, according to International Monetary Fund research. Higher
levels of income inequality are known to encourage drug trafficking and corruption. In fact, the drug
industry may perpetuate and exacerbate income inequality, which may in turn cause the expansion of
drug production and trafficking.
9. Lack of understanding of the relationship between drugs and corruption: -Many studies have
focused on specific events or geographical areas; others have relied on perceptions of corruption.
While these approaches have certain strengths, they highlight a paucity of data on the links between
drugs and corruption across countries. For example, while, intuitively, such a correlation is
anticipated, in terms of research, little is known about the way that different types of corruption
 interact with drug markets and political structures; the way that corruption and violence coexist also
needs further investigation.
10. United Nations-designated terrorist groups: Taliban continues to benefit: -The Taliban’s
involvement in the drug trade is well documented. It has taxed entities involved in illicit opiate
production, manufacture and trafficking in Afghanistan. Further, the Consolidated United Nations
Security Council Sanctions List contains a number of Taliban leaders who are accused of direct
involvement in drug trafficking. UNODC estimated that non-State armed groups raised about $150
million in 2016 from the Afghan illicit opiate trade in the form of taxes on the cultivation of opium
poppy and trafficking in opiates. The overall drug-related income, however, may be higher still. The
Security Council Committee established pursuant to resolution 1988 (2011) estimated the overall
annual income of the Taliban at about$400 million, half of which is likely to be derived from the
illicit narcotics economy.
11. Role of the Revolutionary Armed Forces of Colombia in the drug trade: -The involvement of the
Revolutionary Armed Forces of Colombia (FARC) in the drug trade in Colombia goes back decades.
At various times, they have provided security for coca crops, taxed the introduction of precursor
chemicals and the use of landing strips, sold coca paste and become involved in the intraregional
cocaine trade. FARC agreed in 2016 to halt its involvement in the drug business after the peace
agreement signed with the Government.
12. Evidence implicating other groups is thin: -Media reports and some evidence from official sources
link a number of other terrorist, insurgent and non-State armed groups to the drug trade. For example,
media reports claim that Islamic State in Iraq and the Levant (ISIL) and other armed groups in Iraq
and the Syrian Arab Republic produce and consume “captagon” tablets — typically amphetamine
mixed with caffeine. The group operates in an area likely to be a manufacturing hub, according to
seizure data, but no conclusive evidence has emerged so far, as other groups also operate in the same
area. Boko Haram has also reportedly helped drug traffickers to smuggle heroin and cocaine across
West Africa. During the trial of Boko Haram members in Chad, the court of appeal heard that
considerable quantities of psychotropic substances had been recovered and that Boko Haram
members were regularly involved in the trafficking in and consumption of those substances. Further
north, some evidence suggests that Al-Qaida in the Islamic Maghreb has been involved in cannabis
and cocaine trafficking, or at least in protecting traffickers, but that its overall income from the drug
sector appears to have been rather modest.
13. Income from drugs key for some terrorist, insurgent and non-State armed groups: -Much depends on
the location of a particular group. Some have benefited from being based in areas where drug crops
flourish. Groups that aspire to control large amounts of territory need huge financial resources and
have relied on organized crime and the illicit drug trade to fund their ambitions.
14. Just one revenue stream of many for most group: -Terrorist and other non-State armed groups are
adept at tapping into multiple sources of revenue. If drug profits dry up, the groups may move into
extortion, kidnapping for ransom, bank robberies, sale of natural resources or sale of cultural
artefacts. However, groups aiming simply to stage shocking attacks on civilians can do so with
negligible financial investment.
15. Huge variation in estimates of finances of terrorist, insurgent and other non-State armed groups: -
Little reliable data exist for estimating the overall wealth of terrorist, insurgent and other non-State
armed groups, making it tricky to estimate the importance of the drug trade. Forbes International
attempted to compile a list, but the income of the wealthiest 10 groups (around $5 billion together)
was highly skewed, ranging from $25 million to $2 billion per group.
16. Limited evidence on drugs, terrorism and insurgency: -Much of the work in this area tracks a small
number of groups or builds on sources with an interest in emphasizing or diminishing certain links.
Most information on terrorism is collected by intelligence agencies and is classified, meaning that
researchers have to rely on media reports and studies issued by non-governmental organizations and
think tanks.
 Organized crime groups have existed in various parts of
the world for centuries, and they have been involved in the
international drug trade for almost 100 years. Over this
time, their operations and structures have been
transformed by technology, legislation and shifts in
politics; many of the most infamous drug trafficking gangs
have come and gone. The importance of drug trafficking
for organized crime seems to have reached a peak in the
late 1980s and early 1990s, after which new “business
opportunities” emerged. Many of the current activities of
organized crime groups hardly existed a few decades ago.
Nevertheless, drug trafficking can serve as an incubator
for the development of organized crime groups. At other
times, it may also be an activity that organized crime
groups take up after their establishment in other illicit
markets. Overall, drugs continue to play an important role
for organized crime groups, which have found new ways to smuggle and sell their produce, hide their profits
and intimidate their rivals, influence politicians and eliminate their enemies.

Major transformation of organized crime in recent decades

1. Organized crime groups seize new opportunities

Organized crime groups have always been resourceful in adapting to change. Anything from counterfeiting
and fraud to kidnapping and trafficking in persons has been considered fair game. Probably the most visible
example of this flexibility is the diversification that organized crime went through after the end of alcohol
prohibition in the United States of America in 1933. Criminal groups that had exploited prohibition for
profit in the 1920s went after new “business opportunities” in a wide range of potentially lucrative sectors in
the 1930s. Similarly, after a crackdown on organized crime groups in various parts of the world in the 1990s
(the collapse of the Medellín and Cali cartels in Colombia, for example; the arrest of major organized crime
bosses in the United States and Italy, etc.), new groups emerged with more diversified portfolios that
included environmental crime, cybercrime, identity theft, the smuggling of migrants and money laundering.
Many of the present-day activities of organized crime groups hardly existed in the early 1990s.

In some cases, organized crime groups have been able to profit from tighter regulatory systems. When a
Government legislates to control, for example, hazardous waste, organized crime groups can step in and
provide a cheaper service by circumventing these new standards. The same can be said of regulatory
systems aimed at protecting wildlife, cultural heritage or intellectual property. In general, the ability of
organized crime groups to shift between illicit markets is illustrated by the fact that many of them already
operate in more than one sector. In Mexico, for example, several major groups run activities spanning
multiple business lines.

In recent years, diversification among criminal groups, including drug traffickers, has increased rapidly. In
2013, the European Police Office (Europol) estimated that over 30 per cent of the organized crime groups
operating in the European Union were involved in more than one crime area; the proportion was over 50 per
cent for drug trafficking groups. By 2017, the figure had risen to 45 per cent for all groups and 65 per cent
for groups involved in drug trafficking. Three quarters of drug trafficking groups were involved in
trafficking more than one type of drug. Crimes frequently linked to drug trafficking in Europe include the
counterfeiting of goods, trafficking in human beings, smuggling of migrants and trafficking in weapons.

2. Structural transformation of organized crime groups

Hierarchical structures have a major weakness: they can be easily dismantled when detected by the
authorities. Some hierarchical crime groups have reshaped their structures in recent decades to become
networked organizations. At the same time, smaller groups with looser hierarchies have begun to participate
in international drug trafficking, often using new technologies to reduce the risk of detection. Although most
identified international organized crime groups in the European Union remain hierarchically organized,
Europol suggests a trend away from vertical structures towards horizontal crime groups operating along a
network organization model (cellular structure and less rigid or permanent hierarchies).10 Loose criminal
networks represented 30-40 per cent of organized crime groups identified by Europol in 2017. Although
they exist in all drug markets, loose criminal networks are particularly present in the trafficking of herbal
cannabis and synthetic drugs, including new psychoactive substances (NPS). This type of network is often
more nimble than other types and their members can communicate more rapidly, making them highly
effective in delivering goods and harder to track down. When individuals are targeted, the network can
quickly regroup around new players, making them extremely resilient. The fragmentation of criminal
markets with the emergence of small crime groups and even individual criminal entrepreneurs is especially
pronounced in online activities, including the trafficking of drugs over the darknet. But drug trafficking is
certainly not restricted to a single type of criminal group. Strongly hierarchical groups such as those in
Mexico, Japan and to some extent the Russian Federation continue to be involved in the drug trade.

3. Transformation of organized crime and drug markets through technology and logistics

Organized crime groups are locked in fierce competition, not only with the authorities but also with their
rivals. As is the case for any commercial activity with a strong field of competitors, crime groups wanting to
stay ahead need to be first to deploy the latest technology.

Organized crime groups have long focused on speeding up transportation of drugs by using ships, containers,
aircraft or even by manufacturing their own semi-submersible vessels. As a result, they have been able to
transport ever larger amounts of drugs across the globe. The mobile communications revolution has offered
new risk-averse opportunities. Rather than engaging in personal contact with clients, drug dealers can now
use low-level runners to collect cash before letting the customer know by text message where to collect their
drugs. Even when dealers get caught, they are rarely in possession of anything more than a small quantity of
any particular drug, clearly reducing their “business risk”. Added to this, dealers can use encryption
software to protect their communications and data — a problem for law enforcement authorities that is
compounded by the growing popularity of native encryption on mobile devices.22 As a result, a list of
potential clients' telephone numbers saved on a cell phone or a SIM card is now a valuable asset that can
even be traded among crime groups.

More recently, reports suggest that drug trafficking gangs have been hacking into drone management
systems used in the United States to police the Mexican border and systems used by the port authorities in
Antwerp to track containers. Europol has highlighted the emerging phenomenon of criminal groups hiring
specialist hackers and expects such activities to grow in importance.

Still a niche market in the global context but with strong growth potential, the darknet is an encrypted
network where users can anonymously exchange goods and services, both legal and proscribed. Darknet
users get drugs posted to them after paying in a crypto-currency such as bitcoin. Its anonymity reduces the
risk of arrest for both dealers and users, and also eliminates other pitfalls associated with buying drugs, such
as the possibility of falling victim to other forms of crime in neighbourhoods where drug dealing is rife. For
the time being, the darknet accounts for only a small percentage of drug sales. Typical buyers are
recreational drug users who mostly purchase cannabis, ecstasy, cocaine, various types of hallucinogen and
NPS. They are less prone to ordering heroin and methamphetamine. But drug purchases on the darknet are
growing rapidly in some countries and its more direct process cuts several links out of the supply chain. A
study of so-called “cryptomarkets” concluded that nearly a quarter of their overall revenue, both in
September 2013 and in January 2016, was generated by transactions greater than $1,000, suggesting that
some purchases are intended for offline distribution. While drug trafficking over the darknet is still relatively
small in scale and concentrated in developed countries, it is fast growing and has the potential to
significantly reduce the need for the large, staff intensive, drug distribution networks that have been
operating for decades in cities across the globe. If this were to happen, the results would be difficult to
predict. For instance, the current cultivation areas of plant-based drugs would be unlikely to change. But at
the distribution level, street dealers could end up in violent competition for their dwindling client base, or
they may look for alternative ways of making money. While violence in the core drug business (the supplier-
customer relationship) might be reduced with the spread of anonymous drug purchases, it is less clear
whether this will ultimately result in more or less crime.

Evolution of links between organized crime and drug trafficking

Most of the increase and involvement of organized crime groups in drug trafficking worldwide occurred
after the Second World War. While there were still some individuals involved in the illicit drug tradein the
1960s and 1970s, groups became dominant in the 1980s, when business became increasingly cross-border
and complex. The 1990s witnessed a new phase with the powerful Medellín drug cartel collapsing in 1993
and the Cali cartel being taken out in 1995, eliminating the groups that had controlled much of the
international cocaine business. The fall of the Colombian cartels heralded a series of changes in the drug
trafficking scene during the 1990s, including the emergence of smaller groups. They turned out to be
efficient in trafficking drugs but were less of an immediate threat to the State as such.

In Myanmar, the Mong Tai Army had controlled much of the production and export of heroin to countries in
East and South-East Asia, prior to being dissolved in 1996.This disrupted the supply chain it had established
through Hong Kong, China and Taiwan Province of China and on to the markets in North America. In
destination and transit markets, several so-called “big bosses” of organized crime in Italy and the United
States were also arrested during that decade. They had
previously controlled much of the trafficking of drugs in
their respective countries.36 After these disruptions, smaller
groups emerged, some of which were spinoffs from the
dismantled groups. Many of them continued to rely on the
drug trade, even though the overall importance of drugs
appears to have started to decline as organized crime groups
discovered new lucrative and less risky business
opportunities.

Similarly, the emergence of new organized crime groups

from the successor States of the former Soviet Union and
other transition countries in Eastern Europe in the 1990s
seemed to presage the decline in significance of the drug
trade for organized crime groups. These new groups were
never primarily focused on drug trafficking. However, a
UNODC study with a global focus suggested that by 2002
half of the 40 criminal groups operating in the 16 countries investigated counted illicit drugs as their main or
core activity.
Drugs remain an important market for organized crime

Despite the transformations in recent decades and a trend towards crime diversification, the drug market
continues to play a key role in organized crime activities. In Europe, illicit drugs not only constitute the
single largest organized crime market, but also a market that shows a high degree of both collaboration and
competition between organized crime groups across national, linguistic and ethnic divisions.
Europol identified some 5,000 international organized crime groups operating in the European Union in
2017, over 35 per cent of which were involved in drug trafficking — more than in property crime, the
smuggling of migrants, trafficking in human beings, excise fraud or any other illicit activity. Compared
with organized crime groups operating in other crime areas, such as financial and economic crime, property
crime and counterfeiting, organized crime groups involved in drug trafficking tend to be larger. As a
consequence of globalization and cross-border networking, Europol concluded that non-European Union
crime groups involved in the drug trade in Europe are nowadays made up of citizens from a large number of
countries; most likely countries in Latin America, the former Soviet Union, Afghanistan, Pakistan and
countries in East Asia and in North Africa. Seventy per cent of organized crime groups in Europe are
composed of members of many different nationalities.

State responses to drug trafficking groups

The emergence of powerful and politically influential cross-border drug trafficking organizations in the
1980s prompted national Governments to commit to international legal obligations to fight such criminal
activities. One of the key instruments they adopted was the United Nations Convention against Illicit Traffic
in Narcotic Drugs and Psychotropic Substances, 1988, which specifically warned of “the links between
illicit traffic and other related organized criminal activities which undermine the legitimate economies and
threaten the stability, security and sovereignty of States”. Governments agreed on a broad range of measures
to fight drug trafficking, including extradition, confiscation of proceeds, mutual legal assistance, precursor
control, anti-money laundering measures and controlled deliveries.

The 1988 Convention also stipulated that serious offences such as the production, manufacture, transport,
sale, importation, exportation of drugs would be extraditable, ending years of impunity and curtailing the
ability of crime bosses to continue their operations from behind the walls of local prisons. In the
Americas, this may have prompted organized crime groups to adjust their strategies. Rather than sending
drugs straight to lucrative final destinations where extradition treaties were enforced, they may have begun
to make use of transit countries from where extradition was less likely, even if prices were lower and profits
were smaller.

This changed international drug trafficking flows as well as the power structures of organized crime groups.
Colombian groups, for example, may have given up influence, enabling Mexican organized crime groups to
fill the void and develop into powerful drug cartels. The change also may have created new opportunities for
smaller groups to get involved, expanding the chain of drug trafficking in transit countries, notably in
Central America and later in Africa, where drug trafficking groups brought instability and violence.
Successes in the fight against drug trafficking, partly prompted by improved international cooperation,
brought rising levels of risk and motivated several organized crime groups to look for alternative
opportunities that would attract less attention from authorities. Against this backdrop, a new international
tool was devised to fight organized crime.
In2000, the United Nations Convention against Transnational Organized Crime, also called the Palermo
Convention, was signed. Signatories agreed to criminalize participation in organized crime groups, money
laundering, corruption and obstruction of justice. The Convention extended the framework for legal
assistance, law enforcement cooperation and extradition from drug trafficking to all forms of organized
crime.

In parallel, efforts increased to deal with the drug problem, not only from the supply but also from the
demand side. The 1998 Political Declaration and its Action Plans, the 2009 Political Declaration and Plan of
Action, as well as the Outcome document of the 2016 special session of the United Nations General
Assembly on the world drug problem, stressed the importance of demand reduction efforts as part of a
balanced approach to address the drug problem. National Governments have also sought to counter the
technology harnessed by drug trafficking organizations by updating their standards on the acceptance of
electronic evidence, training their staff in the detection and use of this kind of evidence, and introducing new
strategies specifically targeting the use of social and electronic media by drug traffickers.

However, many Governments seem to have started shifting their focus from drug control to a broader range
of criminal activities. The illicit drug trade is increasingly seen as one crime typology among the many.
Budgets have been rising for fighting terrorism, trafficking in persons, cybercrime, money laundering,
corruption and various other forms of economic crime. In parallel, international assistance for anti-narcotics
activities and alternative development has declined; remarkable because overall development assistance has
continued to increase since 2009.

DRUG PROCEEDS AND ILLICIT FINANCIAL FLOWS

Billions of dollars flow through the hands of drug trafficking organizations each year, and what they do with
that money can have a huge
impact on local and wider
economies. They might
smuggle cash out of their home
country, buy or build real estate,
invest in restaurants and
casinos for money laundering
purposes, or stash their profits
in offshore financial centres.
Depending on the method they
choose, property prices can be
distorted, unfair competition
created, licit businesses
crowded out, corruption
bolstered and the climate to
attract international investment
spoilt, ultimately eroding rule
of law and economic stability.

This section assesses how much

money drug-related crime generates and describes how trafficking groups channel their money into the
wider economy, particularly when they send money abroad, in which case it is termed “illicit financial
flows”. Understanding these processes is a vital component in the fight against both financial and drug-
related crime.

Proceeds of drug crime

Measuring the financial significance of illicit activities enables the comparison of criminal activities across
sectors. The term “proceeds” is equivalent to “sales”, “turnover” and “revenue”. In the case of drugs, it
represents the quantity of drugs sold multiplied by respective retail prices.
Some recent global estimates suggest that the proceeds of drug sales accounted for slightly more than
one quarter of overall revenues of transnational organized crime groups in 2014, with a maximum range
from around one fifth to one third of such revenues. In recent years, drug-related income seems to have
represented the second largest source of income — after counterfeiting of a broad range of goods — of
transnational organized crime groups at the global level.

1. Drug proceeds in industrialized countries

Drug money was the second largest source of criminal revenue in the United States, the United Kingdom of
Great Britain and Northern Ireland, the Netherlands and Italy, according to estimates dating from 2000-2009
compiled by UNODC. All other criminal activity was dwarfed in terms of revenue by tax evasion,
according to the study, which also included data from Australia and Germany. If tax evasion is excluded,
drugs accounted for between one fifth and one quarter of the total proceeds of crime in the six countries
combined over this period,the data suggest. With tax evasion included, drugs still account for roughly 10 per
cent of the total proceeds of crime.

In the European Union, the 2013 drug market is valued at approximately 24.3 billion euros a year.
According to studies that valued the drug market in 2010, as a percentage of economic output, drug sales
were less important in the European Union than in the United States. In 2010, spending on drugs amounted
to 0.23 per cent (27.7 billion euros) of the gross domestic product (GDP) of the European Union,49
compared with 0.7 per cent ($109 billion) in the United States.

The 2010 estimate in the European Union was equivalent to roughly 25 per cent of overall criminal proceeds,
making drugs the third largest source of income from organized crime there, after tax fraud and
counterfeiting. Excluding tax fraud, drugs accounted for 34 per cent of total revenues of organized crime in
the European Union Accounting for 42 per cent of the total proceeds of organized crime after tax fraud was
excluded, drugs were even more important in seven western European countries — Finland, France, Ireland,
Italy, the Netherlands, Spain, United Kingdom — when taken together. According to the statistical office of
the European Union, Eurostat, European households in 21 European member states spent a total of 21 billion
euros (0.3 per cent of GDP) on drugs in 2015. This estimate, based on figures from countries representing
around half of the total GDP of the European Union,53 showed a decline compared with 1995, when
spending was estimated at 0.6 per cent of GDP. A similar decline has also been observed in the United
States in the past two decades; illicit drug sales fell from 1.6 per cent of GDP in 1990 to 0.7 per cent in 2010.
Drug sales expressed in constant currency units have fallen in the United States since the late 1980s, but in
Europe they have increased over the past two decades. This suggests that the marked decline in the
proportion of drug sales to GDP in Europe is the result of stronger growth of GDP in other sectors rather
than a declining drug market.

Drug sales increased in the 21 European Union countries by some 50 per cent from 1995 to 2008, the year
when the global financial crisis hit. From 2008 to 2015, sales declined by some 10 per cent. Drug sales in
both Spain and the United Kingdom (0.6 and 0.4 per cent, respectively, of GDP) declined by 15 per cent
over the period 2008-2015. The largest decline was reported by Cyprus. This could suggest a link between
drug sales and the financial crisis. However, estimates from Greece show a strong increase in drug sales
over the period 2008-2015 (31 per cent), suggesting that the financial crisis was not necessarily the
determining factor for explaining changes in the drug markets. Meanwhile, countries including Austria,
Finland, Lithuania, Luxembourg, Portugal and Sweden all recorded drug sales as less than 0.1 per cent of
GDP in 2015.

2. Drug proceeds in major drug-producing countries

In contrast to the European Union or the United States, where drug markets represent a very small
proportion of the total economy, in present-day Afghanistan and in Colombia at the turn of the millennium,
the situation was very different. In Afghanistan, the net value of opiate exports fluctuated between 7 per cent
and 16 per cent of GDP over the period 2011-2016, according to UNODC estimates.

In Colombia,
according to
some studies,
the illicit
income from
all crime
activities
(including
drugs) has
fallen consistently for almost two decades. The
decline in drug-related income in Colombia went in
parallel with an overall reduction in the area under
coca cultivation — by roughly 70 per cent over the
period 2000-2013 — as well as strong declines in
opium production. Another UNODC study
developed a more detailed model for the cocaine
trade: the share available for money laundering of
both retail sales (proceeds) and gross profits was
estimated at 62 per cent in 2009.But the proportion
varied hugely along the supply chain. At the retail
level, on average 44 per cent of gross profit from
cocaine was available for money laundering; the
proportion rose to 92 per cent at the wholesale level.
The UNODC study also suggested that the figure
varied according to location. Overall, the proportion
of gross profits available for laundering at the
wholesale level ranged from 87 to 94 per cent, and
at the retail level from 32 to 50 per cent, between
sub regions. In North America, about half of cocaine related gross profits at the retail level were available
for laundering; in Western and Central Europe, the proportion was slightly lower (44 per cent). These
figures suggested that 35 per cent of the income generated in cocaine retail sales in North America and 26
per cent in Western and Central Europe were available for laundering purposes. Similarly, a study of seven
western European countries (Finland, France, Ireland, Italy, the Netherlands, Spainand United Kingdom) by
Transcrime showed a broadly similar picture for heroin at the retail level. The study estimated that between
25 per cent and42 per cent of overall heroin retail sales in 2010 were available for investment into the legal
economy; another way of saying that those funds were available for money laundering.

Laundering drug profits

Estimates suggest that well over half of the gross profits generated by the drug trade are channelled into
money laundering. In the late 1980s, the Financial Action Task Force(FATF) assumed that between two
thirds and 70 per cent of drug money was laundered. The FAT study, one of the first to make such an
estimate, based its figures on interviews with experts in the field. The conclusions broadly tally with a
UNODC review of the literature from Australia, the Netherlands and the United States in 2011.Those
studies used different methodologies, but the overall average proportion of money available for laundering
out of crime proceeds was roughly 70 per cent, with reported figures ranging from 39 per cent to 83 percent.
Most of this money would be laundered through a small proportion of the cash may also be hidden and
stocked for use at a later stage.

Cross-border laundering: illicit financial flows

Drug traffickers spend their profits in a variety of ways — from buying luxury items such as yachts
and jewellery, to investing in real estate and using offshore financial centres. Some traffickers use
laundering networks embedded into their overall organizational structure and directly employ accountants
and lawyers; other groups outsource to "independent” networks that specialize in hiding the proceeds of
crime. With the slow decline of hierarchical crime organizations and the emergence of loose hierarchical or
networked
structures, the
trend is moving
towards
professional
outsourcing.
While some
drug money is
laundered inside
the country,
some is hidden
or reinvested
across borders,
constituting
drug-related
illicit financial
flows. There
is very limited information on the proportion and level of drug profits that are laundered outside the country.
As with any commercial business, this will most likely depend on where the profits are to be enjoyed, and
the margins that can be made on top of the money generated. A model developed by UNODC for the
2009cocaine market estimated that about 30 per cent of cocaine proceeds at the global level translated into
illicit financial flows. Another study based on interviews with prisoners involved in the drug trade in Italy
came to a similar conclusion, suggesting that roughly a third of the money spent by cocaine users was being
laundered across borders. But drug trafficking groups trying to launder money outside their countries will
face costs, which will reduce the actual amounts that can be invested back into the licit economy. Large-
scale operations looking to launder hundreds of millions of dollars could face fees of between 5 and 10 per
cent, according to testimony from an undercover agent of the United States Drug Enforcement
Administration who worked as a money launderer for a major cocaine smuggling operation in Colombia and
Venezuela (Bolivarian Republic of).Examples from Afghanistan suggest that people using the informal
hawala money remittance system had to pay 1 to 2 per cent of the total funds for a money transfer.

DRUGS, TERRORISM AND INSURGENCY

From Latin America to the Middle East, funding for armed violence has in certain instances long been linked to
the illicit drug trade. By some estimates, around half of the income of the Taliban in Afghanistan comes from its
involvement with narcotics (mostly opiates);and FAR appears to have relied heavily on the cocaine trade
for much of the past two decades — until recently— with estimates a few years ago suggesting that between
one quarter and half of its total income was derived from such illicit drug activities. Armed groups in the Syrian
Arab Republic are said to use amphetamine pills, and there are indications that terrorist organizations in West
Africa might be involved in cocaine and cannabis smuggling. The drug trade has been a significant source of
income for some of those groups, for others it has-been one of many revenue streams, while in some
cases it may hardly have played a role at all.

Terrorist, insurgent and non-State armed groups

While there is no universally agreed definition of terrorism, the United Nations Security Council, regional
organizations and Member State Governments have designated numerous armed groups as “terrorist” groups,
and international treaties define terrorist offences. The Security Council has imposed sanctions on some 80
groups and more than 380 individuals linked to the Taliban, Al-Qaida and Islamic State in Iraq and the
Levant (ISIL) on the grounds that they are involved in terrorist activities or support such activities. The
Taliban, Al-Qaida, ISIL and its affiliate Boko Haram were responsible for 74 per cent of all deaths
caused by terrorist, insurgent and non-State armed groups in 2015.

The most comprehensive evidence linking the terrorist groups on which the Security Council has imposed
sanctions in relation to the drug trade relates to the Taliban, which has taxed entities involved in illicit drug
production, manufacture and trafficking. It has also been
directly involved in drug trafficking. Some evidence suggests
that Al-Qaida in the Islamic Maghreb, which operates
primarily in North and West Africa, has been involved in
cannabis and cocaine trafficking, or at least in
protectingtraffickers,105 though the group’s overall income
from the drug sector appears to have been rathermodest.106
Individual commanders of the Movement for Oneness and
Jihad in West Africa, which broke away from Al-Qaida in the
Islamic Maghreb, seem at present to be directly involved in
drug trafficking. In and around the Syrian Arab Republic,
seizure data on “captagon” pills — typically amphetamine
mixed with caffeine — suggest that a manufacturing hub
exists in the area of operations of ISIL, Al-Qaida offshoot
Jabhat Fateh al-Sham (formerly known as Al-Nusrah
Front)and other armed groups. ISIL and other non-State
armed groups have been linked in media reports to the
production of “captagon”, but no conclusive evidence has
emerged so far. ISIL fighters as well as those of other groups involved in the civil war in the Syrian Arab
Republic have also been reported to consume “captagon”. Based mainly in Nigeria and neighbouring
countries, Boko Haram has reportedly helped drug traffickers to smuggle heroin and cocaine across the sub
region. Further links between the group and the drug trade were revealed during a court case in Chad. In its
judgment of 28 August 2015 in the trial of 10 alleged Boko Haram members, the N'djamena court of appeals
heard that considerable quantities of psychotropic substances had been recovered during the search of the
home of one of the Boko Haram defendants. The court concluded that Boko Haram members were regularly
involved in the trafficking in and consumption of those substances. Looking beyond entities on which, the
Security Council has imposed sanctions, individual United Nations Member States and non-governmental
organizations identify several additional organizations as either terrorists, insurgents or non-State armed
groups. The most substantial evidence linking such groups to drug trafficking comes from Colombia, where
they began to play a direct role in the drug trade in the 1980s and gained importance in the 1990s. They
provided security for coca crops and taxed the introduction of precursor chemicals and the use of landing
strips. FARC in particular played a prominent role in taxing different aspects of the production chain and in
selling coca paste, and later became involved in the cocaine trade to neighbouring countries. In neighbouring
Peru, the Shining Path (Sendero Luminoso) used the profits from cocaine processing plants to fund its
activities over four decades. The group was particularly active in the 1990s. Insurgent groups and rebel
armies operating in eastern Myanmar, notably in Shan state, have reportedly been involved in the heroin
trade for the past six decades and in methamphetamine manufacturing and trafficking for the past two
decades.

Elsewhere in the world, the evidence supporting links between terrorist, insurgent and non-State armed
groups and the illicit drug trade is less rigorous.

Funding of terrorist, insurgent and non-State armed groups

Data on the funding of terrorist, insurgent and nonstate armed groups is incomplete, with estimates varying
widely; all aggregations must be treated with caution. However, such figures can give some likely orders of
magnitude. UNODC estimated that terrorist and insurgent groups raised about $150 million in 2016 from the
Afghan opiate trade in taxes levied on the cultivation of opium poppy and trafficking of opiates. Their
overall drug-related income, however, may be higher. The Consolidated Security Council Sanctions List
features a number of Taliban leaders who are accused not only of taxing the drug business, but also of direct
involvement in trafficking. The Security Council Committee established pursuant to resolution 1988 (2011)
estimated the overall annual income of the Taliban from all sources at around $400 million, half of which
was likely to have been derived from the illicit narcotics economy. In Colombia, FARC seems to have been
heavily reliant on coca/cocaine-related income, particularly at the turn of the new millennium. Despite a
drop in revenue as the Colombian coca/cocaine sector started shrinking, drug-related income appears to have
remained an important source of income in subsequent years as well. As an outcome of the peace process
and the Peace Agreement signed in 2016, there is now agreement that FARC is to halt its involvement in the
drug business as it turns into a legal political force.

Estimates of the income generated by the illicit drug trade need to be considered from the perspective of the
overall income of terrorist, insurgent and other non-State armed groups, for which there is very little
authoritative information. For example, Forbes International attempted to value the world's 10 richest
terrorist and other groups, with an estimated total combined income of $4.9 billion in 2014. The reported
income distribution, however, appears to have been highly skewed, ranging from $25 million to $2 billion
among the 10 richest organisations. More than half of the income was attributed to groups officially
recognized by the United Nations as terrorist organizations (ISIL, Taliban, Al-Qaida, Al-Shabaab and Boko
Haram). ISIL was estimated to be the richest terrorist group in 2014, with a turnover of roughly $2 billion.
However, ISIL suffered territorial losses and therefore obtained lower tax income and revenue from oil and
less potential for looting and confiscations. As a result the group’s income had reportedly declined by more
than half by 2016, although it is likely that their expenses also declined sharply as they were no longer in
control of as many cities and villages as before.

Drugs and terror attacks

Some 170,000 people lost their lives in terror attacks between 2000 and 2015, including 30,000 in 2015
alone, according to the Global Terrorism Database, the largest systematic collection of open-source
information on terrorism acts worldwide. The database, which has information on 163 countries going back
to 1970, uses the umbrella term “terrorism” to cover attacks by terrorists, non-State armed groups, rebels
and insurgents. In some cases, there is a positive correlation between terror attacks, as defined by the Global
Terrorism Database, and the world’s most intensive areas of drug manufacturing and trafficking as reported
in 2015. Some of those areas see a significant number of terrorist incidents. However, a correlation does not
necessarily point to a causal link. Some areas where the drug trade is intensive are not significantly affected
by terrorism, and vice versa.

1. Opium poppy cultivation and insurgency in Afghanistan

Afghanistan, accounting for close to 13 per cent of all terrorism-related deaths worldwide between 2000
and 2015, gives a great insight into the potential link
between drug production and terrorism. The Taliban was
responsible for 73 per cent of all terrorism-related deaths
in Afghanistan during the period 2000-2015, and 84 per
cent of such deaths in 2015. This was followed by ISIL,
which accounted for 4 per cent of the total in 2015. High
levels of insecurity in Afghanistan have been related to a
range of events: conflict, disputes and terrorist activities.
They have also been associated with opium poppy
cultivation; however, it is only since 2010 that high and
increasing levels of opium cultivation have shown a closer
correlation with rising terrorist attacks. The reasons for
this are complex, but armed groups have found it
increasingly difficult to access “traditional” funding
sources, which may have resulted in a stronger reliance on
“alternative” financing such as drug trafficking.

The post-2010 rise in violence is also linked to a number

of other factors, including the withdrawal of North
Atlantic Treaty Organization (NATO) forces and subsequent disbanding of provincial reconstruction teams,
the emergence of destabilizing groups opposing the peace process, and the expansion of the illicit economy
into new areas such as the illegal exploitation of natural resources, which has led to the emergence of new
insurgent groups. More broadly, the areas under opium poppy cultivation in Afghanistan are, to varying
degrees, controlled by diverse terrorist, insurgent and other armed groups, including the Taliban. Between
26 per cent and 85 per cent of the area under opium poppy cultivation is estimated to be under varying
degrees of Taliban influence.

A socioeconomic survey conducted in Afghanistan in 2016 revealed that villages with opium poppy
cultivation are more likely to be under the influence of anti-government groups (61 per cent) than villages
without opium poppy cultivation. Moreover, it was found that the increased influence of insurgency groups
and a deterioration in the security situation in the north of the country coincided with an increase in opium
poppy cultivation. Clearly, a lack of government control is conducive to the expansion and persistence of
opium poppy cultivation.
 2. Drug cultivation and
terrorist, insurgent and non-
State armed groups in Peru,
Colombia and Myanmar
Examples in Peru, Colombia and
Myanmar show the complex
relationship between drug cultivation and the activities of terrorist, insurgent and nonstate armed groups.
While a causal relationship cannot be established, reductions
in drug cultivation can go in parallel with lower levels of
activity by such groups; and lower levels of insurgent
activities can help to strengthen the application of the rule of
law by the authorities and thus contribute to a reduction in
illicit drug cultivation. In Peru, the area under coca
cultivation shrank by nearly 70 per cent from its peak in
1992 to 2015. During the same period, the number of
people killed by terrorist, insurgent and non-State armed
groups fell from 818 in 1992 to six in 2015; most of those
fatalities were the result of operations by the Shining Path,
which was behind 772 deaths in 1992, but just three in 2015.
Most operations by the Shining Path took place in, or close
to, the Alto Huallaga region, which used to be the main coca
cultivation area in Peru. This is also illustrated by the
number of attacks and casualties suffered by the personnel
of Proyecto Especial de Control de Cultivos de Coca
(CORAH). Between 2005 and 2012 there were around 30
attacks, with 133 injuries and 11 deaths of CORAH
personnel. The number of attacks by terrorist, insurgent
and non-State armed groups over the past three decades
shows a positive correlation with the area under coca
cultivation in the Alto Huallaga region, with declines in
coca cultivation since the early 1990s going hand in hand
with declines in attacks.

Similarly, in Colombia the area under coca cultivation

shrank by 70 per cent between 2000 and 2013 during a
decline in the number of operations by FARC. The
number of victims of violence by non-State armed groups
also showed a marked decline over the same period. The
number of people killed by non-State armed groups fell
from 426 in 2000 to 137 in 2013; among them, the number
killed by FARC declined by almost 60 per cent, from 256
in 2000 to 106 in 2013.139 However, the apparent
connection between coca cultivation and violence has become less straightforward in recent years.
Cultivation doubled between 2013 and 2015 even as FARC-related killings declined further, by more than
half.

In Myanmar, there is a weaker correlation between the activities of various non-State armed groups and
insurgents and the area under opium poppy cultivation.140 The number of people killed in terror attacks fell
from 86 in 1996 to zero in 2006. They rose again to 58 by 2015, when the area under opium poppy
cultivation had tripled.

3. Terror tactics and drug money

Evidence on the links between drugs, terrorism and insurgency is patchy, focuses on a small number of
groups, or builds on sources with an interest in emphasizing or diminishing those links. Most information on
terrorism is collected by intelligence agencies and is classified. Open-source information largely comes from
media reports and studies by non-governmental organizations and think tanks. Governments rarely release
detailed information to the public.

Nevertheless, it is possible to draw some tentative conclusions. In general, income linked to the drug sector
is only one of several revenue streams for terrorist groups. If one revenue stream dries up, another can be
tapped, such as extortion, kidnapping for ransom, bank robberies, sale of natural resources or sale of cultural
artefacts. As a result, reducing drug production and drug trafficking may not be sufficient to effectively
squeeze the financial resources of terrorist and other non-State armed groups and insurgents. At the same
time, there is evidence that drug production and the activities of some of these groups may go hand in hand
in some areas.

Their level of dependence on the drug trade — whether taxing farmers, protecting routes and trade, or direct
involvement in production and trafficking — will be determined by their size, structure, ideology, location
and existence of alternative financial sources. The prominence of drugs in financing will thus vary strongly
from one group to another. Insurgents aiming to control large amounts of territory are likely to need large
financial resources, and involvement in organized crime activities, such as the drug business, may at least
partly cover those funding needs. Yet much will depend on their strategy. A pointed attack focused on
maximising media exposure and creating fear and intimidation does not necessarily need large or sustained
funding. In fact, channelling smaller amounts of money through operations of that nature can reduce the risk
of detection. Besides, there will always be a large number of “soft targets” for such an attack, which can
easily be exploited by terrorists with or without drug money.

Crime other than drugs

In addition to militant Islamist organisations’ global-scale investments, analysts highlight the increased use
of criminal modus operandi of jihadi cells and home-grown terrorists in Western countries. Indeed, AQ
provides a training manual containing instructions for certain criminal activities including counterfeiting and
forgery. A recent analysis on the finance of European jihadi cells confirmed that ‘personal assets’ represent
the most prevalent source of funding, with criminal activities the second at 38 per cent. One such example is
the Madrid bombing in which a Moroccan drug dealer financed the entire operation by exchanging hashish
and ecstasy for explosives. According to Rollins and Wyler, authorities conducted one of the largest drug
seizures in Spain’s history when they confiscated thousands of ecstasy tablets. The crime-terror nexus has
expanded into the very homes of zealous jihadists. Judging from what the Spanish authorities found, it is
increasingly difficult to distinguish between career criminals and jihadist terrorists when it comes to analysis
of the home-grown jihadist threat. The examples above reveal that today’s generation of Islamist terrorist groups
have fully indoctrinated organised crime. Indeed, as Rid acknowledges, " One of the [Salafi-Jihadist] ideology’s most
vital functions appears to be to resolve the contradictions of jihad in the 21st century: being a pious Muslim, yet
attacking women and children; upholding the authority of the Qur’an, yet prospering from crime; depending on
Western welfare states, yet plotting against them; having no personal ties to any Islamic group, yet believing oneself
to be part of one." The argument that ideological disparities still inhibit collaboration or criminal activity
appropriation among Islamist terrorist groups simply does not hold today.

Assessing Ideological Motivations

While investigating the role of the religio-political Salafist ideology in militant Islamist organisations ;
drawing from radicalisation research and gang theory, reveals that the motivations for which individuals join
Islamist terrorist groups vary in a number of ways, many relating to the sense of identity, purpose, adventure,
and money. The paramount motivation for joining is not grounded in the Salafist ideology, but rather rooted
in a matrix of internal and external influencing factors reinforced by group dynamics. The analysis continues
to identify the ways in which ideology is actively used as a means, and does not represent the end goal. The
true motivations for today’s significant Islamist terrorist groups are similar to that of criminal groups—
power, money, and status.

Why Join? Ideology’s Diminishing Value in Jihadi Group Dynamics

A Social Analytical Lens

First it is necessary to place gangs and terrorist groups in a wider social context. Both groups represent
violent subcultures. Subcultures consist of marginalised cultural groups that retain behavioural norms,
values, motivations, and beliefs different from normative society. Pioneer gang researcher Cohen theorises
that gang subcultures emerge as “social solutions” to societal grievances. Similarly, Black hypothesises that
terrorist groups emerge as a form of “social control”. As two group-based social solutions, terrorist groups
and gangs represent similar phenomena." Gangs seem to be quite effective at fulfilling a variety of symbolic
functions—including friendship, revenge, and peer affiliation—that are largely independent of instrumental
concerns such as making money or achieving political or religious ends. In this regard, gangs resemble
terrorist groups, whose members are often attracted by the opportunities for peer affiliation" Both terrorist
and gang group dynamics exhibit comparable social functions, “Gangs often lack effective mechanisms for
controlling behaviour, so they haven’t evolved into more formal organisations that could foster terror or be
targets for increased radicalisation.” It is relevant to recall the phenomenon of Third Generation Gangs
(3G2). Reiterating the definition, 3G2s constitute “the most complex gangs and they operate—or aspire to
operate—at the global end of the spectrum, using their sophistication to garner power, aid financial
acquisition and engage in mercenary-type activities”.3G2s bridge the conceptual gap from basic gang
formations to sophisticated criminal or terrorists groups. Essentially 3G2s do equip “effective mechanisms”
for controlling gang behaviour. Their subculture has a number of controlling norms i.e. initiation rites, codes,
and ranking systems. They exhibit cultural “artefacts” like tattoos, uniforms, and gang signs. Violence and
crime become pragmatic and symbolic values within a group’s identity. Cottee explains how stealing is as
much an instrumental act, but also “it is an activity valued for its own sake, for its own pleasures and
satisfactions.”3G2s, though very sophisticated and exponentially more violent than street gangs, are gangs in
social theoretical terms. Incidentally, violence and crime for 3G2s retain a high symbolic value, that when
committed, binds the group closer together.

Terrorist groups are gangs as well. Sageman’s “bunch of guys” hypothesis furthers the notion that social
bonds characterise terrorist groups, just as they do gangs. Summarily, ideology does not alone constitute the
“effective mechanisms”, or as Quiggin of the Terrorism Research Initiative calls, “the glue”, by which
extremists unite under one Islamist identity and direct violence towards a cause. The explanations of terrorist
group dynamics pertain much more to gang behaviour and social sub-cultural theory. Despite this plausible
theoretical framework, Schmid and Pierce point out the “surprisingly few studies” that investigate
radicalisation to terrorism and the joining of organised crime groups as comparable phenomena. Analysing
Jihadists groups first and foremost as a product of social group dynamics in which the behaviours are
reinforced through high levels of organisation and sub-cultural maintenance ultimately yields the best
analytical results

Jihadism as a Global Gang Subculture

Jihadism, though an especially violent extremist religio-political ideology, suits the same social diagnostics.
Cottee proposes that AQ and affiliates as well as other jihadist groups in the west “represent a collective sub
cultural solution to social strains experienced by the individuals who form or join these groups.”Referencing
Sageman, Cottee recalls that the third wave of “wannabe jihadists” are often lower in socio-economic class,
younger, less educated, more westernised, and less pious. Many of these characteristics match the general
profile of gang members who often belong to unstable families, live in neighbourhoods of low socio-
economic class, and perform poorly in school. Individuals with such internal characteristics are vulnerable to
these extreme “social solutions”. Decker and Pyrooz cite particular “push and pull factors” for the joining of
gangs such as a need for protection, a sense of adventure and excitement, sense of belonging, and elevation
of status. In regards to terrorist groups, “Religious fervour rarely has much to do with what draws people to
join such groups […] Deep down, it’s about purpose. Belonging. Excitement. A sense of identity. Order
amid disorder. A focus for pent-up rage.”The internal watch points of gang and terrorist individuals coincide
to a considerable degree. Moreover, religious zeal does not appear to be highly integral to the radicalisation
process, or at least it does not represent the paramount condition.

Notable critics Horgan and Atran warn against the narrow analytic scope that links “radicalisation” directly
to violent terrorist acts. Horgan claims, “The idea that radicalisation causes terrorism is perhaps the greatest
myth alive today in terrorism research […First], the overwhelming majority of people who hold radical
beliefs do not engage in violence. And second, there is increasing evidence that people who engage in
terrorism don’t necessarily hold radical beliefs.”This suggests that ideology has a misplaced role in the
analysis of the Islamist crime-terror nexus threat.

"Prislam"

Prisons provide a relevant example in which to study the variables (i.e. internal motivations, external factors,
and gang dynamics) that contribute to the process of radicalisation. Prisons are environments where gangs
and radical ideas thrive. Recent trends suggest an increasing threat of radicalisation [to Islamism] in prisons.
The threat termed “prislam” pertains to “‘gang-like cliques’ that use cut-and-paste versions of the Qur’an to
give a religious layer and justification to their violent and criminal activities.”Prisons then present a unique
opportunity, a microenvironment, in which violent gang subcultures and radical Islamism collide.

Cilluffo of the Homeland Security Policy Institute notes that radicalisation in prison is nothing new, that
“prisons have always been an incubator for radical ideas". Current trends show that the number of
conversions to Islam have increased as well as the conversion to radical Islamism. Moreover, the lapse in
time between conversion and radicalisation has decreased, with some members converting immediately to
the most radical version of the religion. According to Sinai, various internal and “situational” factors
contribute to radicalisation within prisons. Prison gangs, he says, facilitate the radicalisation process. In
agreement, Goldman states, “While prisoners can be ‘converted’ and radicalised by terrorist inmates in
Western countries, it is much more likely that prisoners will be radicalised through Muslim gangs.”

More often than not, the reasons for which some prisoners convert to radical Islam are not ideological, but
because of the already present gang dynamics and strong social bonds. Intrinsically, inmates want to feel a
sense of purpose, belonging, and safety. According to Hamm’s research, most inmates convert because
“they are in personal crisis, seek a spiritual dimension, are looking for a group to protect them, want to
manipulate the system, or are influenced by the outside world.”Gangs provide these needs. Moreover,
Muslim gangs are assuming dominance in the "markets” of these needs. Reports claim Muslim gangs are
“taking over” within prison institutions. For instance, Muslim gangs have asserted control over cell phone
and cigarette smuggling within prison walls. Though in "prison-cellular” form, power dynamics are equally
at play in prisons as they are in the outside world. According to a2011 study on Whitemoor’s prisoner
relationships "There were some intimidating ‘heavy players’ among the Muslim population, who appeared
to be orchestrating prison power dynamics rather than propagating or following the faith. Many physically
powerful prisoners ‘re-established their outside identities’ as leaders in the prison and used their(newly
acquired) faith status as a tool for establishing influence". In addition, others are attracted to the material
benefits that Muslim prison gang-life can provide, such as better food options and free cell time for praying
rituals.

Pure religious intentions, or the belief in the radical Salafist ideology itself, seem markedly absent in prison
environments. Dr. Saathoff’s testimony during a Senate Committee Hearing on prison radicalisation
observed that after 9/11, over one third of the inmates cheered at the recent strike at the United States. They
had no religion in common, he says, rather a “vulnerability to radicalisation”. This suggests that various
ideologies in highly contested, gang environments function as an outlet for members for their frustrations
and rage provoked by external circumstances. In parallel, it is used by certain groups as a tool to channel a
target population’s disgruntlements in order to harvest power. According to Sinai, “Prislam” is supposedly
“unique to prisons” because the religion is intertwined with “the values of gang loyalty and violence". This
micro-scale example, however, can be applied to macro-level environments, particularly extremely
fractionalised, war-torn societies. Instead of prison yards, there are large swaths of territory in the Middle
East. Instead of illicit cell phone and cigarette prison markets, there are the global illicit drug and oil trades.
In lieu of prison gangs are highly sophisticated, transnational 3G2s who compete in a high stakes
environment for money, status, and power.

Accounts “From the Ground”

Outside the prison, accounts from jihadists and Western foreign fighters bring insight to the true motivations
for which they fight for jihadist groups. These motivations are again, similar to the motivations of gang
members, and are not ideologically oriented. One report identified that sixteen out of the twenty-three
foreign fighters interviewed had not been religious, but rather the motive for going was driven by “an
emotional response to injustices perpetrated by an outside group.”Indeed one special report studied a group
of over two thousand AQ youth fighters who identified as either revenge, status, identity, or thrill seekers.
Over thirty percent identified as “revenge seekers”. Moreover, those angry and frustrated youths" initially
claimed that their reason for fighting was to punish the West for its attacks on Muslims. As the discussions
progressed, however, it became clear that they had been angry with members of their families, especially
their fathers, or had been involved in neighbourhood disputes and squabbles before becoming interested in
al-Qaeda."Other than anger, a sense of identity, or affinity is a motivating factor. Smith recounts the story of
Salem, a teenager from Aleppo, who decided to leave the Syrian Free Army (SFA) for Liwa Islamia (AQ
sympathiser). She comments, "It was a well-thought-out decision that had nothing to do with [Salem’s]
religious beliefs.”Salem himself states, "When I was fighting with the FSA, if someone was injured, they
would leave him behind […] But the jihadists will never do that. Even if someone is killed, they will get his
body back, no matter what.”Salem, rather than being a prescriber of Liwa Islamia’s jihadi ideology, appears
to be attracted to the sense of brotherhood and level of devotion between members. Although “seeking”
types do not characterise all members of jihadists groups, Salem’s decision reflects how the AQ brand
serves a wide range of recruits looking for an outlet for anger, an escape from ordinary life, or a means to
achieve status and a sense of identity.

The jihadist brand is also very “cool”. Sageman first coined “jihadi cool” to describe the allure of the AQ
brand to self-radicalising individuals via the internet. Temple-Raston of National Public Radio (NPR)
comments, “It used to be that jihadi recruitment videos opened with the call to prayer and readings from the
Quran. These days, many of the mare decidedly less religious. They look more like something that would
appear on MTV.”The special report above notes that only five percent of AQ youth recruits classified as
“thrill seekers”. Experts recognise however, that "while religion may be an initial motivation to sign up, in
the fullness of time, it becomes less important.”Rather, the motivations to fight can evolve to thrill- or fun-
seeking motivations. Stern notes that “professional” jihadists admit that they find jihad “addictive”. After
asking militants why they were attracted to such groups, Fair reports, “The top three answers were
motorcycles, guns, and access to women. You had to go pretty far down the list to get to religious
motivation.”Sociologist Katz further explains “jihadi cool” as “the paradigmatic appeal of the ‘badass’ given
a jihadi mask.”Gangsters highly value their image as a “badass”—which “manifest[s] the transcendent
superiority of their being, specifically by insisting on the dominance of their will.”Countless pictures across
social media depict a “gangster” life of jihadists, with members showing off military bravado, guns in the air,
sitting in the backs of trucks and on top of tanks.

The Mexican Sinaloa cartel similarly flaunts a glamorous, gangster life-style. Their organisation is
synonymous to an ultra-luxurious life of cars, girls, gold-plated guns, and above all—status. They also
display military bravado. For example, Alfredo Guzmán, son of Sinaloa kingpin Joaquín Guzmán (“El
Chapo”), posted on his twitter account a picture of his “armed commando”. Alfredo issues a flippant
warning for any who are thinking of stepping onto his turf. Relatable, in an article on defecting jihadists, one
defector left ISIS when the illusion of “luxury goods and cars” dissolved upon his arrival in Syria. Not all
fighters fit the trend, but the bridging of gangster cultural expression and jihadism is a new element of the
crime-terror nexus. The trend is enough for scholars and policymakers alike to question the fighters’
motivations—is it jihad, or “G-had”?

Lastly, members also cite very pragmatic reasons for joining. De Bie et al conducted an analysis on the
ideological and pragmatic values within jihadi groups. Applying their research specifically to migrants, they
aim to assess which values attract individuals more to jihadi networks. They conclude, “Jihadi-Salafism did
not seem to be the core instigator of the [migrants’] observed activities.”They conclude that pragmatic
“benefits”, or solutions, can be a determining factor in the joining and participation in ideologically extreme
groups. Significantly, “One such pragmatic solution can be crime.”Criminal enterprises produce money, and
have therefore added a new pragmatic dimension to jihadi networks. The migrants in the study eventually
involved themselves in lucrative illicit enterprises such as passport forgery, burglary, and drug dealing.
Many jihadist members specifically allude to money as a motivation. One Kenyan al-Shabaab member for
example states, "It was all about the money […] I was jobless. And then when al-Shabaab came with that
huge money and they’re giving you that for free, you just have to join them. Most of these youths in Kenya,
they 'rejoining al-Shabaab not because of jihad or Islam, it’s because of that money. Jihadism in this case
represents a straight forward pragmatic solution to the desperate situation of unemployment and poverty.
Another study alludes to the profit motivations of recruiters. The study claims that the recruiters on the
border between Syria and Jordan are paid on the “quality” of recruits they can acquire. The “well-connected
and well educated men command higher prices than the more marginalized, poorer, and less educated.” In
other words, the recruiters have a smuggling business that has built-in incentives. The study refers to one
man who had to choose between the Free Syrian Army or al-Nusra based on where the recruiter could get
him. The man recounts, “For these recruiters, it’s just a business […] They don’t care who you fight for, as
long as they get their money.”These examples suggest jihadi membership is more heterogeneous than
commonly understood. It appears that ideology plays a less than paramount role in the radicalisation and on-
going participation of individuals. Like gang members, individuals are attracted to Jihadist groups for
reasons linked to social group dynamics and sub-cultural values, or for strictly pragmatic reasons. This at
least indicates an existence of motivational convergence in the crime-terror nexus that current threat
assessment does not recognise because of their limited focus through an ideological lens.

Ideology: A Means to Criminal Ends

As already discussed in Chapter One, Islamist terror has quite the criminal record, explained ideology’s
relatively minor role in group dynamics of Islamist terrorist groups. This last section of this
dissertation seeks to clarify the role that ideology plays in significant militant Islamist groups. The global
Salafist-jihadist ideology does not represent the end goals of these groups, but rather it is the means to
facilitate criminal objectives. Middle Eastern expert Jonathan Schanzer states, The nexus between jihadists
and organised crime is not a new one […] we’ve seen this among other[AQ] groups like [AQIM]. On the
Shia Muslim side of the street, Hezbollah is known to be entrenched in the criminal underworld. Welcome to
the world of pious crime in the name of religion. Schanzer proposes that these extremists groups engage in
criminal activity to forward their religio-political agenda. He is accurate to an extent. These groups do
engage in crime and use their religion as justification for engaging in such activity. Yet, Schanzer implies
that the primary motivation is still “in the name of religion”. In tandem with orthodox predications,
Stepanova also proposes that even when groups conduct an attack for economic gain, it "is not their
dominant raison d’etre.”. Essentially, their position holds that criminal activity is a necessary, pragmatic
means to further their ideological ends; crime then, is ideologically motivated. Contrarily, this dissertation
claims ideology provides the pragmatic means for which to achieve criminal objectives. Engaging in
lucrative drug trade, expansive extortion rackets, human smuggling, and kidnapping businesses are purely
criminal activities, devoid of religious idealism. Islamist terrorist groups exercise “criminal piety”—the
violent, devout investment in organised criminal enterprises to protect, empower, and enrich one’s
organisation.

Ideology as a Justification

The Salafist-jihadist ideological doctrine has evolved in that it now justifies organised crime. The principle
of “jihad”—the inner “struggle” to follow Allah’s path—similarly came to be justified as a physical,
“offensive” struggle. “The father of Islamist terrorism” Sayyid Qutb advocated that every Muslim in the
Ummah had a duty to take up violent jihad. The ideology then evolved to globalist Islamist, which
introduced the concept of “the far enemy” as the root of Muslim oppression. The globalist jihadist ideology
sanctions the killing of civilians, including other Muslims, because they tacitly support infidel governments.
As terror has been adapted in Islamist ideological doctrine, so has organised crime.

Hezbollah’s 1980s fatwa was the first known public legitimisation of criminal activity. The fatwa reads,
“We are making drugs for Satan—America and the Jews. If we cannot kill them with guns, so we will kill
them with drugs.”Additionally, the leader of Jemaah Islamiyah (JI), Abu Bakr Bashir, declared, “You can
take their blood; then why not take their property?”A Fatah al-Islam leader claimed, “Stealing money from
the infidels, from the usurious banks and the institutions which belong to the infidel regimes and states, is a
legal thing which Allah had permitted us to do.”Religious justification apparently also upheld the bin Laden-
Taliban global drug trafficking partnership. AQ member Ali Abdul Nazzer commented in an FBI interview
(2001) on the contradictions of the jihadist cause: The emir [bin Laden] controls it [heroin]. He is the
world’s largest supplier. Everyone knows this. His laboratories in Afghanistan produce between 4,000 and
5,000 metric tons of heroin a year […] He gets richer with every drug deal made on every street corner […]
It’s ironic isn’t it? The emir is fuelled by Western decadence.”Bin Laden’s image as a class “A” drug
dealer is completely antithetical to the religious status of emir that he received. His decision to cultivate
Number Four Heroin—and acquire the necessary expertise and facilities for such a venture—does not
demonstrate pious crime "in the name of religion”, but an aggressive entrepreneurial drive. Meanwhile, he
exploited the global jihadist ideology in order to do it. The modern jihadist ideology is a means for which to
justify these criminal outfits—but not “in the name of religion”; rather, in the spirit of entrepreneurial
dominance and enrichment.

Leveraging Image for Power, Status, and Money

There are clear advantages for terrorist gangs to acquire an image associated with status or power. An
Islamic religious visage is particularly valuable, because it is more culturally legitimate than the image of
criminal groups committing rape, theft, and murder. A religio-political association enhances group access to
organised volunteer manpower, money, and other resources by connecting the group to institutionalised
power structures such as mosques and madrassas. These institutions have routine access to a vast population
of the global ummah, offer systematic means for propaganda dissemination, and a ready pipeline for
organised fundraising. Islamic extremists also exploit the powerful imagery of brutal violence with great
effect. In regions scarred with ethnic factionalism, religious divides, and imposition of radical Islamist
groups, a violent extremist reputation acts as a differentiating edge that further teases apart rival rebel groups,
swallows up members in the fray, and elevates radical Islamist groups. Walter explains the strategic
incentives of adopting an extremist ideology, one of which is the ability to mobilise recruits. Adopting an
extremist ideology creates what Walter calls a “market niche". Similarly, Humayun usefully applies the term
“cultural entrepreneurs” to Islamist groups to describe the ways in which they continuously “innovate” their
ideology to “repurpose sub-cultural content". Islamic teachings, a fractious civil war society, and the
narrative of the Western enemy characterise some cultural facets that various generations of Islamist
extremists have sought to repurpose in the religio-political jihadist ideology. According to Humayun, they
find “innovative” ways i.e. extreme violence to express this “cultural content”. The result is a market niche,
in which a population looks to them as a new vanguard that will lead them to a social solution long denied to
them.

Islamist terrorist groups are very much like gangs in that they are violent sub-cultural communities that fulfil
the needs and desires of its members. The reasons for which individuals join radical groups coincide with
gang members’ rationale for participating in gangs. Most importantly, pragmatic values were seen in some
cases to overtake the value of ideology. Ideology is not the paramount motivation among members.
Furthermore, the Salafist-Jihadist ideology appears to be an instrumental apparatus for the legitimisation of
criminal enterprises and a credible disguise for the aggressive criminal motivations of power, money, and
status.

The Politics of Organized Crime: Securing Loyalty

Organized crime also serves as a proximate cause of state failure by feeding on some of its symptoms and
key grievances: poverty and insecurity. An important element of state failure is the inability of the state to
provide public goods, especially security and economic opportunity. Organized crime serves to reinforce
this failure of the state by providing alternative sources of protection and finance, thus directing loyalty
away from the state and further weakening its control.

Economic need rather than greed is the driving force behind the decision by most peasants to participate in
the drug economy. In Afghanistan the cultivation of poppies emerged as a survival mechanism in the
absence of a functioning legitimate economy. Opium became the basis of economic transactions. Cash could
be obtained through opium sales, however it was also a means of securing loans and credit under a coercive
system of futures called salaam. Moreover, growing poppies earns farmers considerably more than growing
legal crops. In Tajikistan the drug trade coincides not only with those regions beyond government control,
but also the poorest parts of the country. Moreover, the people whom it recruits are often the poorest and
most vulnerable. Increasingly women are becoming drug traffickers and dealers, many of them war widows
with many children to support.39 Not only does the drug industry take advantage of the state’s inability to
provide a stable income to its most vulnerable citizens and entrenched itself in their lives, it exacerbates this.
By drawing citizens into the informal economy it shrinks the state’s tax revenues, further eroding its ability
to provide social good.
 The ability of criminal organizations to offer economic opportunities that the state cannot provide
serves a severe challenge to the capacity of the state to command loyalty. The extent to which ordinary
citizens are dependent on the drug economy is profound: up to eighty percent of Afghans and fifty percent of
Tajiks are connected to it. This feeds into state failure by focusing individual loyalties away from the state
and towards lower-levels of political association, most notably the clan. The drug industry is largely based
on sub-ethnic solidarity, which is also an important way of coordinating political and military action in the
region as well as for providing individual security in the absence of functioning state institutions. Thus,
economic well-being and security have become functions of a clan-based drug industry rather than the state;
the void has been simultaneously widened and filled. This is one of the key challenges that the interim
government is now facing in Afghanistan. In the absence of state social support in most of the country,
peasants are once again turning to opium cultivation and the protection of local warlords to provide
necessary economic and physical security, which in turn is limiting the state’s tax base and ability to fill this
gap. By re-orienting survival techniques towards the clan and usually its respective warlord, organized crime
detracts from the political authority of the state, contributing to its irrelevancy in the everyday lives of
citizens.

The situation is complicated further in Afghanistan and Tajikistan by the presence of political opposition
groups in regions dominated by criminal organizations, which strengthens the ties between economic and
political preferences. Drug mafias, insurgency groups and the government all compete to control the
behaviour and loyalty of individual citizens. The tacit if not outright cooperation between organized crime
and the Taliban and IMU means that the decision to engage in opium cultivation is tied to support for anti-
state political organizations: need, greed and creed merge, whether or not this is a conscious choice. Support
for insurgency groups may become quite active, however, especially if they are perceived to protect and
permit the drug industry upon which citizens have come to depend for both economic and security
provisions. In Tajikistan, regions with high political support for Islamic opposition groups coincide with
regions where the IMU and the drug trade are most active. Similarly in Afghanistan, the greatest resurgence
of opium cultivation has occurred in the south, where there is also growing support for Taliban once again.
When such strong connections exist between economic survival, security, drugs, warlords and insurgency
groups, the state faces a significant challenge to maintain its relevancy in the lives, hearts and minds of its
citizens.

The Politics of Organized Crime: Corruption and Illegitimacy

The most straightforward yet perhaps the most insidious way in which organized crime contributes to the
process of state failure is through corruption and de-legitimization of the government. Although much of this
analysis has focused on the contribution of organized crime to violence against the state, profit is the raison
d’être of organized crime and the means of profit can be both violent and non-violent. The primary reason
for which criminal groups seek to control and defend territory is to create a safe haven for their operations,
however the transnational nature of most criminal economies demands further risk management strategies,
which include corrupting local governments. The transnational characteristic of organized crime has been
labelled the single greatest threat to the region, particularly because it involves a chain of regional and
international players, including government and security personnel, which involve both economic and
political motives. Their influence in the region is established through corruption and intimidation, both of
which are destructive for state and regional security. Where possible, co-opting high-ranking officials
through bribes works best. This destroys the legitimacy of the state, however, turning it into a criminal
organization itself. Once corruption begins to grow it is very difficult to weed out and to re-establish the
state as a credible body capable of governing its territory.

Corruption from the drug trade is already threatening the fledgling Afghan State. High-ranking officials in
the new State are involved in the trade. Many former members of the Northern Alliance have been
incorporated into the government and ironically some of them are responsible for anti-drug programs despite
the fact that poppy cultivation increased in those areas under Alliance control while it fought the Taliban.
Many local warlords have also been brought into the new governance structure in an effort to bring the
entire state under the control of the central government, however this will only contribute to corruption if
their ties with the drug industry are not broken. Thus far there have been no incentives to do so because of
the lucrative tax available on the drugs grown in their regions. Afghanistan thus runs the risk of
institutionalizing the drug industry and becoming a narco-state similar to Tajikistan’s fate following the end
of the civil war. This is reinforcing disillusionment with the interim government and serving as a source of
grievance that the Taliban has been able to exploit for political support.

The drug trade in Tajikistan has been institutionalized within state structures. Drugs were an important
source of financing for both the government and the opposition forces during the civil war, and afterwards
many people involved in the trade were incorporated into powerful positions in the new government,
entrenching corruption. Culpability exists not only in the upper echelons of power, but also in the front lines
of defence against trafficking: security and customs officials. It has been estimated that up to fifty percent of
these personnel are involved in the drug trade. Indeed, the profitability of such positions through corruption
is such that they are sold to the highest bidder. Thus, while Tajikistan is attempting to create an image of
being tough against drug trafficking and flaunts its success at stopping significant amounts of opium and
heroin at its borders, this is only a fraction of the picture. The success stories of drugs stopped at the Tajik
border are a distraction to the amount of drugs that successfully enter and leave Tajikistan. Major shipments
of drugs are rarely intercepted because they enjoy protection from law enforcement agencies. Indeed, those
traffickers stopped at the border may be an attempt by large-scale traffickers with connections to the
government to block competition. Regardless, the heavy involvement of Tajik government officials in the
drug trade is undermining the legitimacy of the government and contributing to its continuation as a failed
state. This reputation reinforces the grievances that non-state actors use to challenge the state. This is evident
in Tajikistan where support for Islamic opposition groups is related not only to poor socio-economic
conditions but also widespread disillusionment with government corruption. Perceived illegitimacy of the
state weakens its support, encouraging people to turn away from it and towards their own criminal means of
survival in a vicious cycle that strengthens the void of the state.

case studies : case of Afghanistan-

Pakistan (aFPak): the archetyPical “Black
hole” scenario
The Afghanistan-Pakistan (AFPAK) region of South Asia is perhaps the locale most conducive to a nexus
between terrorism and organised crime. Afghanistan has been wracked by over three continuous decades of
conflict, dating back to the anti-Soviet War that began in 1979.

Before his execution at the hands of the Taliban, Najibullah, Afghanistan’s last socialist president told an
American reporter: "We have a common task–Afghanistan, the USA and the civilised world–to launch a joint
struggle against fundamentalism. If fundamentalism comes to Afghanistan, war will continue for many years.
Afghanistan will turn into a centre of world smuggling for narcotic drugs. Afghanistan will be turned into a
centre for terrorism. (Michael Griffin, Reaping the Whirlwind: Afghanistan, Al Qa’ida and the Holy War,
London: Pluto Press, 2003, p. 4)"

Little did the former president know, this was precisely the fate chosen for his country by the ISI and their
American partners in crime over at Langley. Though now on the outs with Washington, Hamid Gul was a
staunch U.S. ally during the 1980s anti-Soviet jihad when the CIA made liberal use of billions of taxpayer dollars
to fund the so-called mujahedin or “holy warriors” in a successful bid to bring down Kabul’s socialist
government.

During the war, U.S. and Pakistani intelligence assets linked to organized crime gangs and various smuggling
rackets quickly learned the value of Afghanistan’s number one cash crop, poppy. By the time the first phase of
the war ended in 1989 with the withdrawal of Soviet combat troops, heroin production had morphed into a
multibillion dollar industry along Asia’s Golden Crescent, one that provided a limitless source of black funds–
and hardened combat veterans–to enterprising intelligence agencies.

Since then, Afghanistan has epitomised the term “failed state”, alternatively ‘governed’ by warlords, militias
and various other violent non-state actors. Neighboring Pakistan is a major player in Afghanistan—
according to some sources, its security services, including the Inter-Service Intelligence (ISI), stand accused
of providing sanctuary and safe haven to a patchwork of terrorist groups, including the Quetta Shura Taliban,
or QST (also referred to as Afghan Taliban), Haqqani network and Lashkar-eTaiba (LeT), among others.50
In addition to those groups supported by the Pakistanis, the Tehrik-e-Taliban, or TTP (also referred to as
Pakistani Taliban), is an active terrorist group waging a violent campaign against the Pakistani state and
funding its activities through a reliance on criminal acts. The AFPAK region offers the co-location of both
geography and opportunity space for both criminals and terrorists. Levels of corruption are high, borders are
porous, the rule of law is weak or nonexistent in most areas and parallel economies have developed over
time, fueled by war and narcotics, respectively. KFR, drug trafficking, extortion and taxation all provide
opportunities for criminals and terrorists to finance their organisations, and illicit networks allow each to
engage in specific nodes within the supply chain. The Taliban occasionally cooperates with the Haqqani
network to achieve short-term objectives. Although the network is part of the insurgency, it also functions
like an organised crime group, motivated by profits but also by honour, revenge, and ideology.

Kidnapping for Ransom

The Afghan Taliban’s reliance on KFR as a form of revenue generation can be traced back to the mid- 2000s,
when the group officially altered its code of conduct to allow for the practice. The code of conduct states
that with the permission of Taliban leadership, fighters can kidnap individuals and seek money for the
release of government, non-government organisation (NGO), and private sector staff working on
government projects (this was extended to include truck drivers affiliated with Coalition forces or the
Afghan government).Both the QST and TTP operate in Pakistan’s Federally Administered Tribal Areas
(FATA), although they are markedly different in their organisational structures, objectives, and ideologies.
In what might be the most robust example of a wide scale criminal-terrorist enterprise, members of the
Afghan Taliban and the Pakistani Taliban (along with representatives of the Haqqani network) met in 2007
to negotiate an agreement on how to divide ransom proceeds paid for the return of hostages.

The Haqqani Network operates along the AFPAK border and has kidnapped numerous Afghans and foreign
nationals, including American soldier Bowe Bergdahl. The TTP has extended its activities to major cities,
including Karachi, focusing largely on abductions of businessmen and entrepreneurs.

Drug Trafficking

Though figures vary widely, the narcotics trade generates a significant profit each year for the Taliban.
According to Antonio Giustozzi, reliable estimates are that the Taliban retains an annual surplus of between
$110 and $130 million, with variation from year to year. The Taliban has knowingly (and skillfully)
suppressed the cultivation of poppy in Afghanistan in order to manipulate the international market price. At
one point, a Taliban ban on poppy cultivation suppressed the supply by 90 percent, thus increasing the value
of the group’s stocks by ten times the price.56 Besides deriving significant financial profits from the drug
trade in Afghanistan, the Taliban also gains political capital from its sponsorship of the illicit economy. The
Taliban’s involvement with the narcotics trade has increased steadily over time. In 2004, the group was
sending small teams to attack checkpoints or make diversionary strikes in order to protect opium cultivation.
Three years later, by 2007, insurgent commanders were operating mobile laboratories to process heroin.
Some reports have also indicated that the Taliban has engaged in heroin-for-arms trades with members of
Russian organised crime.

The Taliban now actively promotes the growing of poppy and provides protection to farmers growing the
crop. As Coalition forces continue to target the nexus between narcotics and the insurgency, the Taliban
portrays itself as a defender of Afghans’ livelihoods, while attempting to paint Coalition forces as an
occupying force intent on destroying the crop most important to the Afghan economy. The Taliban’s
sometime partner, the Haqqani Network, is widely thought to be involved in the procurement of precursor
chemicals such as acetic anhydride, lime and hydrochloric acid, which is done through legitimate fronts and
aided by protection from elements of the ISI, which has reportedly shut down any investigations into the
smuggling of acetic anhydride.61 An analysis of recent events in eastern Afghanistan suggests that high
levels of violence, rampant criminality, and indiscriminate brutality could mean that the group has
descended into more of a criminal operation than an insurgent group.
Pakistan is both a major transshipment country and lucrative consumer market.63Indeed, not only does
heroin come from Afghanistan directly into Iran but also via Pakistan and to a lesser extent Turkmenistan,
which has become part of the Iran-Turkey-Balkan route rather than the northern route through Central Asia.
Slightly over 20 percent (30 tons in 2009) of the heroin smuggled into Iran is believed to come via
Pakistan.64Some scholars have asserted connections between the TTP and drug trafficking, alleging the
group is involved in heroin distribution abroad, including into Europe.

Extortion and Taxation

The QST extorts truck convoys through the imposition of transit taxes.66 Occasionally working in tandem
on this front, the Haqqani Network, “collects regular security payments from local, regional, and
international businesses that operate in its zone of influence, effectively selling insurance against itself. The
Haqqanis are extremely opportunistic, appearing to collect money from small local shopkeepers up to large
international firms.”68 The Haqqani Network is one of the most credible versions of a hybrid organisation,
with elements of an insurgent group, terrorist organisation and mafia all in one. It is believed that the
Taliban collects approximately $100 million per year from Ushr, which is an Islamic tax, or tithe, levied on
local businesses and farms. Kharaj, and Islamic land tax, also provides funding to the insurgency.69 As
Gordon and Conway recognise, Taliban taxation of the poppy harvest is not merely an issue of either
counter-narcotics or counterinsurgency, but rather “a threat finance and counterinsurgency issue—it both
funds the Taliban and establishes the Taliban as the legitimate source of governance for the people.”70The
Taliban also target Afghanistan’s telecommunications firms, receiving payments in exchange for not
attacking cell phone towers and kidnapping the firms’ employees.

Financing Conflict: The Taliban, the Northern Alliance

Economic models of conflict emphasize the role that illicit trade plays in both financing armed groups and
sustaining conflict based on motivations of greed. In this sense it is the profits from organized crime that
feed into state collapse by providing economic resources for non-state actors to challenge the state and to
maintain an enduring violence that is characteristic of state failure.10 To identify a proximate role played by
the drug economy in financing conflict and state failure in Afghanistan and Tajikistan, there should be
evidence of armed groups receiving substantial financing from the drug trade and possibly re-orienting their
activities to include economic goals. An examination of the Taliban and Northern Alliance in Afghanistan
and the Islamic Movement of Uzebekistan (IMU), which operates out of Tajikistan, indicates that both
processes have taken place.

The use of drugs to finance conflict in Afghanistan first emerged in 1980. Initially the emergence of opium
cultivation was an indicator of the weakness of the Afghan State. Opium is not a traditional crop in
Afghanistan as it is in Pakistan; significant cultivation emerged only during the chaos and anarchy of the
Soviet-Afghan war both as a means of survival for peasants and as a viable source of income for warring
factions. The growth of the opium economy in Afghanistan can thus be viewed as an effect of state failure
whereby various actors took advantage of the economic and political turmoil, which provides a comparative
advantage for illicit trade, to profit from the drug economy. This simplistic perspective ignores the dynamics
created by the criminal economy that served to sustain conflict and contributed to the continued failure of
the state long after the Soviet withdrawal.

The drug trade was an important ingredient in the continuation of factionalized warfare following the end of
the Soviet conflict. The availability of drug money to localized warlords in part prevented the Mujahideen,
the Western backed faction against the Soviets, from exercising control over the country. As predicted by
economic models of intra-state war, military commanders who were able to operate independently of the
government and Islamic parties actively sustained chaos to maintain their control over the predatory drug
economy. The rise of the Taliban and its exertion of military control over most of the country in the 1990s
seemed to signify the end of warlord politics and the creation of a proper state; however this is a false
conception. The emergence of the Taliban ended neither the political nor the economic power of the drug-
based warlords. Indeed, opium production under Taliban-controlled territory doubled due to the tacit
agreement between warlords and traders with the Taliban: peace in exchange for security and growth of the
opium economy. The rise of the Taliban to power created the necessary stability and security for expanding
the drug trade – warlords continued to exert power over their local regions and were able to focus their
energies on economic activity rather than having to fight one another. Thus, while predatory, warlord
economic and military competition ended, the outcome was merely the transformation to a rentier state
based on a criminalized, open drug economy. The Taliban did not and could not exercise control over the
established warlords who continued to base both economic and political power on the expanding drug trade.
Rather than ending the drug economy, the Taliban formalized it in order to maintain the support of local
warlords and to finance its own expansion throughout the country.

The successful ban on opium production by the Taliban in 1999 is often cited as evidence of the control that
the regime was able to exert over the drug economy, however it has been suggested that the ban reflects
merely the veneer of authority rather than the substance. Writing about the crime-terror nexus in Central
Asia, Tamara Makarenko argues that the ban is best perceived as a result of the Taliban taking advantage of
decisions by drug mafias and traffickers to address a glut in the market and force the price of opiates up.
This claim is supported by the fact that the Taliban did not destroy stockpiles of opium or ever ban trading in
opium. The Taliban did not control the drug trade and it would be incorrect to label it a narco-guerrilla group
dedicated primarily to continuing the drug trade as some scholars have done. Nonetheless, the opium trade
was vital to sustaining the Taliban’s quasi control over the country and in fuelling its final war with the
Northern Alliance.

As part of an immunity agreement with local warlords, the Taliban received a twenty percent zakat or tax on
the opium trade, which amounted to an income of roughly $20 million per year. Thus the expanding drug
economy during the years of Taliban rule also served to expand the organization’s resource base, which was
needed to wage war against opposition political factions, notably the Northern Alliance. Similarly, the
Northern Alliance initially financed its war-making abilities by controlling the emerald trade, however it
came to rely increasingly on income from a zakat on opium, which increased in production drastically in
Northern Alliance territory. Thus both parties relied heavily on income from the opium economy to finance
the war, however neither one of them controlled the drug trade. Consequently, the weakening of the Taliban
and the integration of the Northern Alliance into the interim government has not stemmed the flow of drugs
leaving Afghanistan or ended the ability of local warlords to use it as a means of self-finance.

Two decades of war in Afghanistan demonstrates the devastating effect that criminalized economies
play in the process and sustenance of state failure. While the opium economy may first have emerged as
a result of state collapse and the ensuing chaos, it generated its own momentum. The drug trade created both
a new logic for continuing the conflict and preventing the creation of a functioning state as well as a means
of financing political groups such as the Taliban and Northern Alliance in their war-making efforts

case studies : case of Tajikistan-

Uzbekistan civil war and the IMU
Similar to Afghanistan, the drug economy was used during the Tajikistan civil war from 1992 to 1997 to
fund both sides on the conflict: the government and the United Opposition led by the Islamic Renaissance
Party. For the purposes of this analysis, however, it is the role that drugs have continued to play in
destabilizing the Tajik State that is most interesting. The declaration of peace in Tajikistan ended neither the
armed conflict nor the opium war economy. Parts of the country have remained under the control of
warlords and criminal gangs, who have been able to sustain their independence from the State through
participating in drug trafficking. This availability of financing to warlords and military commanders has
resulted in the fragmentation of political power into zones of influence, with armed formations competing
over economic resources, and has prevented the government from exercising control over parts of the
country. The greatest military challenge to the state, however, has come from the Islamic Movement of
Uzbekistan (IMU).

Although the IMU’s official goal is to topple the Uzbek government and eventually create a caliphate in all
of Central Asia, it has operated primarily from Tajik territory since the end of the war and has been involved
in destabilizing the entire region, financed predominantly by drugs.
In 2001, the IMU controlled seventy percent of the drug trade through Central Asia, with the majority of it
travelling through Tajikistan. The IMU is the only terrorist group in the region that is significantly involved
in the drug trade. Consequently, both its military and political aims, which feed into one another, are
threatening the peace and security of Tajikistan and the surrounding region. In 1999 armed units were able
to launch attacks from Tajikistan into Kyrgyzstan and take control of several villages, ostensibly with the
goal of reaching the Uzbek section of the Ferghana Valley and igniting rebellion against the government.24
Again in 2000 the IMU was able to launch an attack from Tajikistan, this time directly against Uzbek
territory. These attacks were seemingly an attempt to destabilize the region for political purposes, however
there is much suspicion that they were actually carried out to destabilize the border regions in order to
maintain and secure important transport routes for drugs. Not only did these attacks threaten the security of
Kyrgryzstan and Uzbekistan, but they also resulted in the violation of Tajik sovereignty due to Uzbek
counter-attacks, which were justified on the grounds that Tajikistan cannot control its borders or territory.
The drug economy emanating out of Afghanistan, although it created a foothold in Tajikistan during the
civil war, has been instrumental in preventing the emergence of a functional state and abetted the presence
of a terrorist organization that is able to maintain an enduring violence typical of failed states.

The presence of an illicit drug trade in Afghanistan and Tajikistan has followed expectations set out by
economic theories of conflict, whereby drug money has both funded warring factions and has also created
new economic incentives to maintain instability. For the purpose of analyzing the relationship of organized
crime to state failure, the drug trade has been instrumental for sustaining the most salient feature of failed
states: enduring violence. Although in each case the emergence of an illegal economy has coincided with the
weakening of the state, it is overly simplistic to view this purely as an effect of state failure. Instead,
organized crime is best perceived as a vicious cycle that is first attracted to instability and state weakness but
then creates its own momentum, feeding off of and reinforcing further chaos. In this sense, illicit economies
can be viewed as a proximate cause of state failure. It does not create armed opposition to the state, however
it contributes to the intensity and duration of fighting, often long after political motivations have vanished.

Although most analyses that focus on organized crime from the perspective of conflict and state failure
emphasize its ability to finance violence, it has many other insidious effects that serve to propel states
towards failure, mainly by feeding off of root causes and grievances such as poverty and poor governance.
The rest of the analysis will focus on the political effects of organized crime as they pertain to state failure,
which are often overlooked due to an overemphasis on the economic motivations behind it. Although the
motivation of organized crime may solely be profit, the means often have very significant political
consequences that erode the power of the state.

Organized crime based on the drug trade in Afghanistan and Tajikistan on the surface appears to be a
symptom of state weakness, however; it has created its own dynamics that intensify the causes of state
failure and is itself best conceptualized as a proximate cause. Although the raison d’être of organized crime
is profit, the means of operation and the profit itself contribute to a crisis of governance and state failure.
Illicit trade sustains violence and chaos by financing armed groups who are involved in it and provides an
economic incentive to maintain a failed state incapable of exerting control over all of its territory or citizens.
In a less obvious but similarly insidious fashion, criminal organizations reinforce and widen the divide
between the state and citizens by providing the public goods that the state often cannot: economic
opportunities and security. The negative political consequences of this division of labour can extend to
support for insurgency groups when they are associated with the means of survival that the state cannot or
will not provide, especially if the state is perceived as a threat to such means or as illegitimate. Even when
the negative consequences of illicit economies are recognized, they can be extremely difficult to eradicate,
especially once they have taken root within the state itself, as the case of Tajikistan has demonstrated.
Nonetheless, given the contribution that organized crime makes to state failure and its resistance to efforts to
strengthen the state, steps must and can be taken to weaken its presence. To do so, it must be addressed as a
proximate cause of state failure rather than as merely a symptom of deeper root causes. Moreover, as part of
a political economy, care must be taken to isolate the organized greed aspect of organized crime without
exacerbating the legitimate need and grievances of citizens that it exploits and seeks to reinforce.
Case studies : Case of the Islamic State of
Iraq and Syria (ISIS)
The Islamic State of Iraq and Syria (ISIS) is a relatively new terrorist group, but has completely transformed
the notion of a terrorist “organisation” and the way in which it funds its operations. Identified as the richest
terrorist organisation in the world, ISIS has an estimated annual turnover of around $2 billion.

As with the other groups identified, ISIS has funded its activities through a number of illicit activities in
order to expand its operations, particularly in Europe. Investigations into recent attacks on the continent
(particularly in Paris and Belgium in 2015 and 2016) have revealed the group’s extensive cooperation with
European criminal syndicates to obtain either legitimate European passports through the black market, or
forged documents in order to evade detection by border officials and carry out its attacks.

Human trafficking and KFR have been other sources of funding for the group. ISIS has raised substantial
revenue through ransom payments for kidnapped victims, with FATF members providing estimates that
range from 20 million USD to 45 million USD. In response, several UNSCRs, including 2133 (2014) and
2170 (2014), call on all Member States to prevent terrorists from benefitting, directly or indirectly from
ransom payments. In addition, UNSC resolution 2161 (2014) confirms that the prohibition on providing
funds to individuals and entities on the Al-Qaida Sanctions List, including ISIS, also applies to the payment
of ransoms to individuals, groups, undertakings or entities on the list, regardless of how or by whom the
ransom is paid.

The movement of migrants across the Middle East and Africa towards Europe has generated millions of
dollars in revenue for ISIS, with funds going not only to ISIS but also Al-Qaeda-linked groups around the
Sahara and militias in Libya. Reports suggest that ISIS forces Syrians from their homes in a deliberate
attempt to increase their control over smuggling routes, implying a shift in priorities from ideological
towards financial aims.

ISIS also generates vast revenues through its exploitation of the oil and gas sector, taking over wells and
refiners inside Syria and Iraq and smuggling oil to Turkey, with estimates of earnings reaching up to $3
million a day. Some reports indicate that such earnings have declined after the US and allies attacked ISIS
oil facilities.

Aside from oil, a trend of increasing concern is the smuggling of antiquities and cultural artifacts from Syria,
Iraq, and Libya. It is estimated that ISIS has earned between $22 million and $55 million a year taxing
antiquities smugglers, who traffic looted objects out of Syria and Iraq.81 This looting has become more
systematic and organised. The income generated from such activities is used to support recruitment efforts
and to strengthen operational capabilities.82 For example, reports indicate a lucrative illicit art-for-weapons
ring between the Italian mafia and ISIS. The Italian criminal gangs reportedly acquire artifacts from jihadi
tomb raiders from Syria, Iraq and Libya in exchange for a wide range of weaponry.

As mentioned earlier, beyond engaging in these “typical” organised criminal activities to fund its operations,
what sets ISIS apart from other terrorist organisations is the promotion of widespread recruitment of ISIS
inspired terrorists around the world, and particularly in Europe, to carry out “lowcost” attacks abroad.
Reports indicate that up to 90% of jihadist plots in Europe involve an element of self-funding, often through
committing petty crimes.84 Thus, while “sophisticated” transnational organised crime remains an enormous
source of revenue for ISIS to carry out its worldwide operations, there is a troubling trend of large-scale
petty crime used to carry out terrorist attacks, making it possible for any sympathiser or supporter to become
involved virtually border-free.

Case studies : Dawood Ibrahim -

Organized Crime, Intelligence and Terror:
The D-comPany’s role in the mumBai attacks
Over time, a purely criminal group may transform, adopting political goals and new operational objectives.
These organizations can form alliances with existing terrorist organizations or foreign governments to help
achieve their strategic aspirations. Or they can initiate, direct, and perpetrate terrorist attacks without
external assistance, resulting in the group becoming labelled a terrorist organization. Criminal syndicates
often already possess the operational expertise needed to engage in terrorist acts. They may already employ
terrorist specialists to conduct surveillance, transfer money, purchase weapons, build bombs, and eliminate
rivals. A criminal organization can easily transfer this apparatus toward politically motivated ends. The
result is either a truly evolved criminal-turned-terrorist group or a “fused” criminal-terrorist organization
that seeks to develop ties with like-minded ideological movements. The use of criminal skills for terrorist
ends raises the concern among some experts that terrorists may seek out criminals for recruitment or
radicalization, believing them to be a higher skilled partner than non-criminals. A criminal’s participation in
terrorist activity, however, brings greater scrutiny from law enforcement agencies and politicians.
Furthermore, a concentration on terrorist attacks could divert resources away from criminal endeavours,
producing disillusionment and desertion among members who joined strictly for monetary reasons.

Dawood Ibrahim is the most wanted man in India and

is on Interpol’s wanted list for cheating, criminal
conspiracy, and running an organized crime
syndicate. Dawood Ibrahim’s D-Company, a 5,000-
member criminal syndicate operating mostly in
Pakistan, India, and the United Arab Emirates,
provides an example of the criminal-terrorism “fusion”
model. The U.S. Department of Treasury designated
Ibrahim as a Specially Designated Global Terrorist
(SDGT) under Executive Order 13224 in October
2003. In June 2006, President George W. Bush
designated him, as well as his D-Company
organization, as a Significant Foreign Narcotics
Trafficker under the Foreign Narcotics Kingpin
Designation Act (hereafter “Kingpin Act”). D-
Company is reportedly involved in several criminal activities, including extortion, smuggling, narcotics
trafficking, and contract killing. The organization has also reportedly infiltrated the Indian filmmaking
industry, extorting producers, assassinating directors, distributing movies, and pirating films.

As the leader of D-Company, an organized crime group, Ibrahim has been responsible for crimes ranging
from narcotics trafficking to contract killing.

 The group works mostly in Pakistan, India, and the United Arab Emirates.
 He is suspected of having organized and financed the 1993 Bombay bombings, which resulted in 257
fatalities and 713 individuals injured
 Ibrahim shares smuggling routes and collaborates with al Qaeda, according to the U.S. Government

Ibrahim began as a criminal specialist in Bombay, India, first as a low-level smuggler in the 1970s and later
as the leader of a poly-crime syndicate. He formed a thriving criminal enterprise throughout the 1980s and
became radicalized in the 1990s, forging relationships with Islamists, including Lashkar-e-Tayyiba and Al
Qaeda. D-Company’s evolution into a true criminal-terrorist group began in response to the destruction of
the Babri Mosque in Uttar Pradesh, India, in December 1992, and the subsequent riots that killed hundreds
of Muslims. . Outraged by the attacks on fellow Muslims Ibrahim decided to retaliate. A heretofore secular
organization with a sizable Hindu membership now assumed the objective of protecting India’s Muslim minority.

What do you call a “devout Muslim” who exerts considerable control over South Asia’s heroin, gambling,
prostitution and smuggling rackets? Why an intelligence asset, of course! Reportedly with assistance
from the Pakistan government’s intelligence branch, the Inter-Services Intelligence agency (ISI),
D-Company launched a series of bombing attacks on March 12, 1993, killing 257 people.

Following the attacks, Ibrahim moved his organization’s headquarters to Karachi, Pakistan. There, D-
Company is believed to have both deepened its strategic alliance with the ISI and developed links to
Lashkar-e-Tayyiba (LeT), which was designated by the United States as a foreign terrorist organization
(FTO) in 2001. During this time period, some say D-Company began to finance LeT’s activities, use its
companies to lure recruits to LeT training camps, and give LeT operatives use of its smuggling routes and
contacts. Press accounts have reported that Ibrahim’s network might have provided a boat to the 10 terrorists
who killed 173 people in Mumbai in November 2008.

When Lashkar-e-Taiba (“Army of the Pure”–LET) militants slaughtered nearly 200 people in Mumbai during the
November 26 siege in India’s financial capital, one name stood out among a list of 20 fugitives the Indian
government has demanded Pakistan extradite as a key suspect responsible for providing funds and logistical
support to the Kashmir-based terrorist outfit. The U.S. government contends that D-Company has found
common cause with Al Qaeda and shares its smuggling routes with that terrorist group. The
United Nations has added Ibrahim to its list of individuals associated with Al Qaeda.

Enter Dawood Ibrahim, the enigmatic Mafia don of Mumbai’s D-Company whose far-flung organized crime
empire stretches from Dubai through Pakistan to India and beyond. If anyone knows where the proverbial
“bodies are buried,” that man may very well be Ibrahim. Wanted by Interpol and the U.S. Drug Enforcement
Agency (DEA), Ibrahim commutes between palatial homes in Dubai and Karachi where he enjoys the protection
afforded by “friends in high places.”

According to a report in Asia Times Online, “Ibrahim is…suspected of orchestrating the November 26 Mumbai
terrorist strikes through a businessman in Saudi Arabia said to be his frontman.” The Indian-born drug
kingpin has been identified by journalists and investigators as a long-time asset of both the CIA and Pakistan’s
notorious Inter Services Intelligence agency (ISI). A recent study on film piracy conducted by the Rand
Corporation confirms what India has been saying for long about Dawood Ibrahim, an underworld don who is
currently on the wanted list by the Interpol. The Rand study says that Ibrahim is one of the examples
exemplifying the links between crime and terror around the globe.

'The case of Dawood Ibrahim, India's godfather of criminal gangs from Bangkok to Dubai, demonstrates the
blurring line between crime and terror around the globe,' the study said. The study noted that in his early
years, Ibrahim's gang, D-Company, pursued the standard crime-syndicate practices of extortion, smuggling,
and contract killings. 'However, Ibrahim and his cohorts have been able to vertically integrate D-company
throughout the Indian film and pirate industry, forging a clear pirate monopoly over competitors and
launching a racket to control the master copies of pirated Bollywood and Hollywood films,' it said.

'In 1993, D-Company was transformed into a terrorist organization when it carried out the 'Black Friday'
Mumbai bombings, an attack that killed more than 257 people and injured an estimated 713.79 Later, D-
Company developed ties to al Qaeda and the Kashmiri terrorist group, Lakshar-e-Taiyiba while its leaders
were exiled in Pakistan, 'it said. "For all these reasons, in 2003, the US Treasury Department Office of
Foreign Assets Control added Ibrahim to its terrorist watch list and froze his assets. Shortly thereafter, the
United Nations Security Council's al Qaeda and Taliban Sanctions Committee issued a similar order."

'This case demonstrates how an existing organized crime group that turned into a terrorist group leveraged
rackets in the film industry to vertically expand into piracy. While there are no estimates of D-Company's
proceeds from film piracy, the size and sophistication of Ibrahim's counterfeit DVD operation bespeak a
highly profitable enterprise,' The report, prepared by Greg Treverton, the lead author and director of the
Center for Global Risk and Security at RAND, a nonprofit research organization, said that given the
enormous profit margins, it is no surprise that organized crime has moved into film piracy. 'The profits are
high and penalties for being caught are relatively low,' he said.

D-Company’s seeming transformation from a profit-motivated criminal syndicated to a fusion crime-terror

organization also altered its composition. Many of the Hindu members left the group after the 1993
bombings, with some forming a competing gang. While the organization reportedly collaborates with LeT
and Al Qaeda, D-Company’s own terrorist endeavours, its deep pockets, and its reported cooperation with
LeT and Al Qaeda, present a credible a threat to U.S. interests in South Asia, security experts assess.
Lending his criminal expertise and networks to such terrorist groups, he is capable of smuggling terrorists
across national borders, trafficking in weapons and drugs, controlling extortion and protection rackets, and
laundering ill-gotten proceeds, including through the abuse of traditional value transfer methods, like
hawala. By providing those organizations with funding, contacts, and logistical support, it amplifies their
capabilities and durability.

RAND researchers found no evidence that terrorists are widely involved with film piracy, but they outlined
three cases where film piracy supported terror groups and warned that such connections could grow in the
future.' If you buy pirated DVDs, there is a good chance that at least part of the money will go to
organized crime and those proceeds fund more-dangerous criminal activities, possibly terrorism,'
Treverton said.

The report said that while the Northern Ireland terrorist groups aged into pure criminality, this (Ibrahim's)
case illustrates the crossing of the line in the opposite direction, as D-Company transformed into an
organization not just passively supporting terrorists, but with close links to them,' it said.

'Indian authorities had been aware of D-Company's film piracy operations in Pakistan since the 1990s but
were practically powerless to intervene. Only after 2005, when US Customs seized a large shipment of
SADAF-brand counterfeit discs in Virginia, did Pakistani authorities, under a threat of trade sanctions, begin
raiding D-Company's duplicating facilities in Karachi, it said.

Asia Times Online investigative journalist Raja Murthy was told by Lahore-based journalist Amir Mir that
“Dawood’s underworld connects and business ventures are extensive. And he sublets his name in Pakistan,
Thailand, South Africa, Indonesia, Malaysia and the United Arab Emirates, among other countries, to franchises
in the fields of drug trafficking and gambling dens.” Karachi-based reporter Ghulam Hasnain described to
Murthy why Ibrahim was amongst ISI’s most valued assets: “Dawood is Pakistan’s number one espionage
operative. His men in Mumbai help him get whatever information he needs for Pakistan. Rumor has it that
sometimes his men in Karachi accompany Pakistani intelligence agents to the airports to scan arriving passengers
and identify RAW [Indian Research and Analysis Wing] agents.”And what does this “number one espionage
operative” get in return? According to Hasnain, “His home is a palatial house spread over 6,000 square yards,
boasting a pool, tennis courts, snooker room and a private, hi-tech gym. He wears designer clothes, drives top-of-
the-line Mercedes and luxurious four-wheel drives, sports a half-a-million rupee Patek Phillipe wristwatch, and
showers money on starlets and prostitutes.”

Pakistan’s shadowy military intelligence bureau, with organizational and operational linkages to the Taliban, al-
Qaeda, the CIA and Britain’s MI6 has long been suspected of funding planetary-wide terrorist operations and
nuclear smuggling in part, through “black money” derived from the drugs trade and other rackets. Despite this
sordid history, the ISI and their organized crime-linked assets have long been viewed by Washington as allies in
America’s so-called “war on terror.”While American “counterterrorism officials” are now calling for the heads
of Ibrahim, his associate Tiger Memon and former ISI Director, retired Lieutenant General Hamid Gul, described
by the usual unnamed sources as–what else!–“rogue elements,” the United States and their NATO partners have
made liberal use of these jokers in a score of destabilization ops that span continents.

Indeed, after the Afghanistan operation during the 1980s, the CIA and ISI worked together in a score of global
hot spots. From Bosnia to Chechnya and beyond, wherever the dirty work needed doing, a wide pool of
disposable intelligence assets under cover of “Islamic fundamentalism” were ready, willing an able to fill the
breech. It should be noted that characters such as Dawood Ibrahim and others of his ilk have as much in common
with Islam as former New York crime boss, the late, though unlamented, John Gotti did with Christianity.

Destabilization and Covert Ops in South Asia

Occupying a prominent place in the spider’s web, the D-Company certainly fit the bill. India’s 1990s economic
“reforms” bit hard into Ibrahim’s former “cash crop”–gold smuggling. As the globalized market, rather than
bureaucratic Indian regulations gobbled-up D-Company profits, Ibrahim’s gang turned to another profitable
source of income: the global drugs trade. As investigative journalist Misha Glenny points out, Ibrahim, took the
obvious plunge and started trafficking in drugs, chiefly in heroin bound for the European market and mandrax for
South Africa. And in Dawood’s part of the world, if you want to guarantee the success of a narcotics business,
there is only one organization you need to cozy up to–the Inter-Services Intelligence (ISI) Pakistan’s secret
service.(McMafia: A Journey Through the Global Criminal Underworld, New York: Alfred A. Knopf, 2008, p.
135)

Ibrahim followed in the footsteps of a long line of CIA-ISI “best friends forever.” As Alfred W. McCoy
documented in his landmark study, The Politics of Heroin, another darling of dodgy intelligence agencies, the
pathological killer Gulbuddin Hekmatyar, who made his mark in the 1970s by throwing acid into the faces of
Afghan university women, became the chief beneficiary of CIA largesse. McCoy writes, "…over the next decade,
[the CIA] gave more than half its covert aid to Hekmatyar’s guerrillas. It was, as the U.S. Congress would find a
decade later, a dismal decision. Unlike the later resistance leaders who commanded strong popular followings
inside Afghanistan, Hekmatyar led a guerrilla force that was a creature of the Pakistan military. After the CIA
built his Hezbi-i Islami into the largest guerrilla force, Hekmatyar would prove himself brutal and corrupt. Not
only did he command the largest guerrilla army, but Hekmatyar would use it–with the full support of ISI and the
tacit tolerance of the CIA–to become Afghanistan’s leading drug lord. (The Politics of Heroin: CIA Complicity in
the Global Drug Trade, Chicago: Lawrence Hill Books, 1991, pp. 449-450)"

The India to which neo-liberalism has given birth, with one-fifth engaged in consumer excess as never before and
four-fifths in deep misery, can only with difficulty persist alongside the maintenance of civil rights, democracy
and periodic elections. As “market reforms” plunged tens of millions into abject poverty, the ruling elite cast
about for scapegoats and, like European Jews in prewar Germany, the Muslim community became targets of
religious intolerance and communalist fanaticism.

Ibrahim, though nominally a Muslim, was greatly angered by the Mumbai pogrom and vowed revenge. It wasn’t
long in coming. On March 12, 1993, a series of explosions wracked Mumbai in coordinated attacks believed to
have been organized by the D-Company working in tandem with ISI who, like their nominal enemies in New
Delhi, had their own communalist agenda. The largest blast occurred at the Mumbai Stock Exchange when a
half-ton of military grade RDX was detonated in the underground parking garage and killed more than 50 people.
By the time the smoke cleared, nearly 300 people lay dead and hundreds more wounded.

According to a 2002 report in India Abroad, Ibrahim organized the blasts “under pressure from the Inter-
Services Intelligence of Pakistan.” The ISI, which controlled the shipping routes from the Gulf to India’s west
coast, demanded that the mafia transport weapons and explosives into India in return for the use of Pakistani
waters, the sources said quoting official information. The Mumbai underworld’s financial interests were under
pressure as gold prices had crashed and the smuggling routes between the Gulf nations and the western coast of
India had come under ISI control. (“ISI pressured Dawood to carry out Mumbai blasts,” India Abroad, December
22, 2002) It wouldn’t be the first time nor the last that the dapper Mafia don would do ISI’s bidding.

ISI: the Enforcement Arm of Pakistan’s “Military Inc.”

Hamid Gul’s history as a beneficiary of state largesse in the form of plum contracts and other dodgy schemes that
benefitted his family goes back decades. Nor is his hostility to civilian rule. As Pakistani scholar and
investigative journalist Ayesha Siddiqa writes, Gul’s maneuvering against Benazir Bhutto’s first government, led
to her ouster in 1990 through a “soft coup” engineered by the general and other top army officials.

Benazir Bhutto…replaced the head of the ISI, Lt. General Hameed Gul, with a general of her choice, Major-
General Shamsul Rehman Kallu. This did not make her popular with the army, and hence the organization
retaliated. Reportedly, the higher echelons of the army, who were extremely unhappy with her attempts to curb
their power by interfering in internal matters, used the ISI to remove her from power. The army chief, General
Aslam Beg, and the head of the ISI, Lt. General Asad Durrani, obtained a slush fund of approximately Rs 60
million (US$1.03 million) from a private bank, and used to execute the plan for Bhutto’s removal. The money
was given to the ISI to destabilize the civilian government. (Military, Inc.: Inside Pakistan’s Military Economy,
Ann Arbor: Pluto Press, 2007, p. 91)

And what “private bank” pray tell, did the coup plotters reach out to in order to remove Bhutto from power? Why
none other than Agha Hasan Abedi’s Bank of Credit and Commerce International (BCCI) of course! BCCI, a
corrupt financial institution that stole billions from their depositors was a long time “friend” of both ISI and CIA
in their dirty dealings–from drug money laundering to arms trafficking–that spanned continents, from the covert
war in Afghanistan to the Iran-Contra affair. Days after the 2007 Karachi bombings that greeted her return to
Pakistan, and just two months before her assassination in Rawalpindi, Benazir Bhutto accused Gul and
Intelligence Bureau (IB) Chief Ijaz Shah, among others, as the masterminds behind the savage attacks that left
more than 140 people dead and 450 injured. After her assassination, although al-Qaeda commander Mustafa Abu
al-Yazid claimed responsibility for her murder, reportedly on orders from al-Qaeda’s number two man, Ayman
al-Zawahiri, Bhutto’s followers believe the plans for her assassination came from senior ISI officials formerly in
the retinue of America’s “friend,” the dictator General Zia ul-Haq.

Since his 1989 “retirement” from ISI, Gul has been an outspoken proponent of utilizing proxies such as LET as
witting or unwitting assets in Pakistan’s conflict with India over Kashmir–and as a supporter of the Taliban and
another “former” group of U.S. intelligence assets, al-Qaeda. According to The Washington Post, Gul, 71, has
acknowledged that he once was a member of a group of retired ISI officers, Pakistani scientists and others that
was suspected by the United States of giving material support to the Taliban and al-Qaeda. Gul said the
organization, Ummah Tameer-e-Nau, was formed by a group of Pakistani businessmen to aid war-ravaged
industries in Afghanistan.

The U.S. Treasury Department declared Ummah Tameer-e-Nau a terrorist group after a search of the group’s
offices in the Afghan capital, Kabul, unearthed documents referencing plans to kidnap a U.S. diplomat and
outlining basic physics related to nuclear weapons. (Candace Rondeaux, “Former Pakistani Official Denies Links
to Lashkar,” The Washington Post, December 9, 2008, A12). But what Gul (and The Washington Post) will
not, cannot, reveal is that Ummah Tameer-e-Nau was also intimately connected–as was Dawood Ibrahim’s D-
Company–to the illicit nuclear smuggling ring of Pakistani scientist A. Q. Khan. Allegedly run to ground after
overwhelming evidence surfaced linking Khan and Pakistan’s military government to the underground trade in
nuclear technology and know-how, nuclear smuggling is the proverbial third rail of the Pakistani–and American–
defence establishments.

Operating for decades with a wink and a nod from Washington and London, Khan was quietly released from
house arrest in April according to a report by the McClatchy Washington Bureau. This despite the fact that
international investigators found electronic blueprints for an advanced nuclear weapon on computers belonging
to Khan’s smuggling network. According to The New York Times, the latest design found on Khan network
computers in Switzerland, Bangkok and several other cities around the world is half the size and twice the power
of the Chinese weapon, with far more modern electronics, the investigators say. The design is in electronic form,
they said, making it easy to copy–and they have no idea how many copies of it are now in circulation. (David E.
Sanger, “Nuclear Ring Reportedly Had Advanced Weapon Design,” The New York Times, June 15, 2008)
This closely tracks allegations made by whistleblower Sibel Edmonds earlier this year to The Sunday Times that
a U.S. government official “warned a Turkish member of the [Khan] network that they should not deal with a
company called Brewster Jennings because it was a CIA front company investigating the nuclear black market.
The official’s warning came two years before Brewster Jennings was publicly outed when one of its staff, Valerie
Plame, was revealed to be a CIA agent in a case that became a cause celebre in the US.”

Gul however, has a different take on Washington’s newly-minted animus towards him and told the press on
Monday, “I was quite a darling of theirs at the time. I don’t know what this is about. It looks like they have a
habit of betraying their friends.” While true as far it goes, Gul’s disingenuousness is a cynical façade meant to
conceal ISI’s murderous policies. In an obvious appeal to dubious Western constituencies Gul declared, “I
simply fail to understand what all the hullabaloo is about. It’s simply because I speak loudly about the fact that
9/11 was a bloody hoax,” he told the Post. “It was an inside job.”

Dawood's role Mumbai 2008 attack

Though there is convincing evidence linking the D-Company to the Mumbai attacks, each new “revelation” by
Indian and American authorities tend to erase Ibrahim from the picture. This subtle though noticeable reframing
of the equation follows a predictable and well-known pattern. Independent press outlets such as Asia Times
Online however, apparently haven’t gotten the memo.

According to investigative journalist Raja Murthy:"The Pakistan-based Lashkar-e-Taiba terrorists set sail from
Karachi to Mumbai in the ship MV Alpha, allegedly an Ibrahim-owned vessel. After being warned of Indian
navy patrols along the Indian coast, the LET terrorists hijacked an Indian fishing trawler, Kuber, and murdered
its crew except for the navigator, Amarsinh Solanki. The terrorists slit Solanki’s throat five nautical miles off the
Indian coast–the Indian Navy found his body aboard the abandoned trawler with his hands tied behind his back.
Later, they linked up with an Ibrahim gang member in Mumbai who provided them motorized inflatable rubber
dinghies in which they landed ashore after 9 pm on November 26. Within 30 minutes, they struck pre-determined
targets in South Mumbai starting with the Leopold Cafe in Colaba. (“India Wants its ‘Osama’ Back,” Asia Times
Online, December 9, 2008)"

These attacks however, didn’t come out of the blue. According to numerous reports, Mumbai police were given
“solid information” from India’s Intelligence Bureau (IB) and the Research and Analysis Wing (RAW) that
Mumbai was on a list of cities to be targeted by terrorists. India Abroad reports that The first alert was sounded
in February 2008 following the interrogation of a terrorist arrested in connection with the fidayeen (suicide)
attack at the Central Reserve Police Force camp at Rampur, Uttar Pradesh. During the interrogation, the arrested
terrorist had confessed that the Lashkar-e-Tayiba had planned on attacking Mumbai. He had specifically
mentioned the Taj Mahal hotel during his interrogation.
Then came the various intercepts by both the IB and RAW, which both agencies claim had passed on to the
Mumbai police. The first intercept of a satellite phone conversation was three months before the Mumbai attack.
The conversation suggested that the next attack would be a hotel at Mumbai. The conversation also suggested
that it would be better to take the sea route as it was safer. The final intercept was made on November 18, which
was eight days before the attack. (Vicky Nanjappa, “Time & again, Mumbai cops had been warned: IB,” India
Abroad, December 4, 2008)

This report was echoed by The New York Times, which claimed, Two senior American officials said Tuesday
that the United States had warned India in mid-October of possible terrorist attacks against “touristy areas
frequented by Westerners” in Mumbai, but that the information was not specific. Nonetheless, the officials said,
the warning echoed other general alerts this year by India’s intelligence agency, raising questions about the
adequacy of India’s counterterrorism measures. (Eric Schmitt, Somini Sengupta and Jane Perlez, “U.S. and India
See Link to Militants in Pakistan, The New York Times, December 3, 2008)

Despite these suspicions, Indian authorities insist that the terrorists had no “local support” in carrying out the
attacks. According to a report in the Economic Times however, “the don is ensconced safely in his plush
bungalow in Karachi. Sources in security agencies told TOI [Times of India] on Wednesday that it is business as
usual for Dawood. … Mohammed Ali, who is the king of the docks and a key person of the Dawood gang, is
continuing his operations with impunity. Even after the November 26 terror attacks his smuggling racket remains
unchecked.” And Express India reported November 29 that “Ajmal Amin, the only militant arrested during the
operation, told interrogators that the dozen ultras who sailed from Karachi had come to Sasool dock from where
they were taken first to Cuff Parade and later to Gateway of India in boats arranged by a front man of Dawood,
who runs several custom clearing houses in Mumbai, the sources claimed.”

Meanwhile, the Associated Press reported December 9, that the head of Russia’s federal anti-narcotics agency,
Viktor Ivanov, said that Ibrahim had helped the gunmen. “The information that has been received indicates that
the well-known drug trafficker Dawood Ibrahim provided his logistics network for the preparation and
implementation of the attacks.” But Ibrahim wasn’t always the bête noire of U.S. intelligence agencies.
According to Yoichi Shimatsu, a former editor of The Japan Times, during the CIA’s Afghan campaign of the
1980s, Ibrahim “personally assisted” U.S. deep cover operations by diverting money from U.S.-owned gambling
casinos operating in Kathmandu, Nepal.

Shimatsu, commenting on India’s demand for Ibrahim’s extradition for his role in the Mumbai attacks wrote,
Washington and London both agreed with India’s legal claim and removed the longstanding “official protection”
accorded for his past services to Western intelligence agencies. U.S. diplomats, however, could never allow
Dawood’s return. He simply knows too much about America’s darker secrets in South Asia and the Gulf,
disclosure of which could scuttle U.S.-India relations. Dawood was whisked away in late June to a safe house in
Quetta, near the tribal area of Waziristan, and then he disappeared, probably back to the Middle East. (“Did a
Criminal Mastermind Stage the Mumbai Nightmare?,” AlterNet, November 28, 2008).

But as time passes both India and the United States are downplaying Ibrahim’s role while elevating that of
alleged LET commander Zakiur Rehman Lakhvi, reportedly captured by Pakistani authorities during a raid on a
training camp and now in custody. Allegations of an international whitewash of the affair are now being leveled
by journalists. Jeffrey R. Hammond comments, “The recent promotion of Lakhvi to ‘mastermind’ of the attacks
while Ibrahim’s name disappears from media reports would seem to lend credence to Shimatsu’s assertion.”
On Friday, according to a New York Times report, Hafiz Muhammad Saeed, the founder of LET, was detained in
Lahore on Thursday by “Pakistani authorities.”
Despite the appearance of Pakistani resolve, the detention of Mr. Saeed was orchestrated by the government in a
way to minimize what many here expect to be an angry reaction from the public, and from a broad spectrum of
Islamic militant groups sympathetic to Lashkar-e-Taiba. (Jane Perlez and Salman Masood, “Pakistan Detains
Founder of Group Suspected in Mumbai Attacks,” The New York Times, December 11, 2008) Saeed, briefly
detained in 2002 after an earlier “crackdown” on militant outfits, became the leader of the Islamic charity,
Jamaat-ud-Dawa, which is a recruiting arm for the LET.

Meanwhile, according to the Times, “There was still uncertainty on Thursday about whether Maulana Masood
Azhar, the leader of Jaish-e-Muhammad, another militant group, had been placed under house arrest, and
whether the Lashkar commander suspected of running the Mumbai operation, Zaki ur-Rehman Lakhvi, had been
arrested.” So much for arresting Mumbai’s alleged “masterminds.” Sounds more like Captain Renaud’s quip
in Casablanca: “Round up the usual suspects!” Indeed, a deal earlier this year to have Pakistan hand Ibrahim
over to Indian authorities was scotched by the CIA. The Agency, fearful that too many dirty little secrets would
come to light, including the criminal activities of high-level CIA personnel, nixed the proposal. According to this
reading, the Mumbai attacks were a backlash for the proposed double-cross of Ibrahim and that any future
arrangements along these lines would have serious consequences. Why would India seek to downgrade Ibrahim’s
role? Hammond comments,

But while Lakhvi, Muzammil, and Hafiz Saeed have continued to be named in connection with attacks in
Mumbai, the name of Dawood Ibrahim seems to be either disappearing altogether or his originally designated
role as the accused mastermind of the attacks being credited now instead to Lakhvi in media accounts.
Whether this is a deliberate effort to downplay Ibrahim’s role in the attacks so as not to have to force Pakistan to
turn him over because of embarrassing revelations pertaining to the CIA’s involvement with known terrorists and
drug traffickers that development could possibly produce isn’t certain. But what is certain is that the CIA has had
a long history of involvement with such characters and that the US has a track record of attempting to keep
information about the nature of such involvement in the dark or to cover it up once it reaches the light of public
scrutiny. (Jeffrey R. Hammond, “Role of Alleged CIA Asset in Mumbai Attacks Being Downplayed,” Foreign
Policy Journal, December 10, 2008)

And so it goes, on and on… Meanwhile, business as usual will continue and the bodies pile up. Which just goes
to show, as investigative journalist Daniel Hopsicker has reminded us on more than one occasion:
“Being connected means never having to say your sorry.”

Strategy to Combat Transnational Organized Crime

The evolution of the relationship between OC and terrorism, and the widespread discord on its very nature,
has translated into muddled responses by policy makers and practitioners seeking to address this emerging
threat. Thus far, international and regional responses to the OC-terrorism nexus have remained limited in
that they tend to either focus on “traditional” terrorist activities (such as the financing of terrorism), at the
expense of organised crime (or vice versa), rather than tailoring efforts that acknowledge and address the
nexus itself.

Furthermore, while the relationship between organised crime and terrorism is often political in nature, and a
product of the local context and political economy, efforts to counter this phenomenon have largely
remained tactical and reactive in nature, with responses primarily driven by law enforcement objectives.
While such responses are no doubt important, they lack strength in addressing the root causes of the
increasingly interlinked roles between criminals and terrorists. In other words, such interventions thus far
have failed to address why terrorists and criminals are increasingly becoming one and the same.

In examining the implications of the regional analysis for policy responses, several important conclusions
can be drawn:

1) If the distinction between contemporary organised crime and terrorist groups is increasingly hard to draw,
then the value of defining these groups as one or the other has less value, and may indeed serve to hinder
rather than assist the development of effective responses.
2) If the growth and manifestation of the most effective crime and terror groups globally presents more of
an alternative governance challenge than a security challenge, then the nature of the response must be re-
calibrated accordingly.
3) Responses must mitigate not only the transnational dimensions of the threat presented, but also to the
local legitimacy that groups garner.

It was noted that the classic strategy for addressing criminal or terrorist groups is a top-down effort to raise
the costs of criminal or terrorist enterprises: to deter, to interdict or to raise the risk-return ratio. Instead,
however, when the legitimacy and governance dimensions presented by contemporary groups is accounted
for, these strategies have demonstrated to be ineffective, if not counter-productive.

The United States and much of the rest of the world is currently engaged in a pitched campaign against
terrorism and to a lesser extent organized crime. In theory, as the two threats cooperate or mimic each other,
it should be helpful for governments to use the lessons learned from fighting each type of organization. In
reality, though, the threats are changing daily and both organized crime and terrorist groups are learning
from past mistakes while probing recent defences erected by targeted nations. They are constantly
challenging sluggish, state-centric responses to their asymmetrical, adaptable organizations and methods.
While some terrorist groups are hierarchical in structure, more typical is a cell-based, amorphous structure
like that of Al Qaeda, which devolves power and authority to autonomous or semi-autonomous groups
across dozens of countries. Such structures dramatically increase the challenge to government efforts at
combating these groups.

The analysis presented in this paper suggests the need to draw a distinction between those interventions that
are intended to prevent the alignment of terrorism and organised crime, and those which are targeted at
breaking this nexus in existing groups once it is already in place. Making this distinction may serve to
clarify where and how to respond in specific cases.

Strategies to combat organized crime in general and drug trafficking in particular can be grouped into two
categories: reducing supply and immobilizing crime lords. Traditionally efforts have focused on the
former, particularly through crop-eradication and substitution as well as interdiction. Current policy analyses
with regards to Afghanistan continue to call for similar efforts and include a new emphasis on military
security. Such efforts do not address the proximate role that organized crime plays in state failure, however,
but merely treat it as side effect of poverty and conflict. Moreover, they often exacerbate the need and
grievances of citizens that are intertwined with organize crime, further eroding loyalty to the state.
Consequently, such approaches are not likely to succeed as evidenced by the lessons learned in similar cases,
particularly Colombia and Peru.

Targeting opium cultivation is not likely to have an immediate impact on the drug trade and thus address its
role as a proximate cause of state failure, which is the crux of management and prevention. First, efforts that
focus on coercive crop eradication ignore the political implications of involvement in organized crime and
will likely contribute to the erosion of popular support for the state. This happened in Peru, where
government coercive measures against farmers increased their allegiance to the Shining Path, and currently
anger is rising in Afghanistan against coalition forcers over covert crop dustings. Second, attempts at crop
substitution through economic support are not likely to be sustainable in the absence of immobilizing the
organized elements of the drug trade.

Michael Kenney of Penn State University writes that al Qaeda has transformed organizationally much the
way that Colombian trafficking groups did after U.S. and Colombian law enforcement targeted cartel leaders.
Their similar modes of operation may be instructive to U.S. and foreign law enforcement and
counterterrorism units seeking al Qaeda’s destruction. The main strategy for law enforcement and
intelligence agencies to stop cell-based and vertically organized terror and organized crime organizations
will demand much greater local intelligence that currently exists, and a deeper understanding of personalities,
modus operandi, culture, and financing. Unfortunately, the track record of U.S. programs designed to
eliminate narcotics trafficking does not bode well for similar efforts to halt terror groups also involved in the
drug trade.
The International Crisis Group (ICG) reports that recently in Tajikistan the Agha Khan Foundation has
enforced a smuggling ban near the border with Afghanistan by threatening to cut off aid, without which it
would be impossible to survive. This is not sustainable in the absence of either eternal support or true
economic development. Given the vast difference in earning opportunities between opium cultivation and
trafficking and legal local crops such as wheat and onions, however, addressing the drug trade through anti-
poverty measures will take decades of structural economic reform at both the local and international level.
Moreover, efforts aimed at the supply side of the drug trade tend to have paradoxical effects. In Latin
America, they have simply caused displacement and dispersion of cultivation to other regions and have
added economic value to coca production, raising the incentives of anti-state actors to strengthen their
military and territorial power over those regions. The point is not that efforts should not be made to target
root causes of the drug trade and state failure, especially poverty, but that this is not the key to addressing
the immediate problems of the drug trade. Although organized crime preys on poverty, it is not merely a
symptom. Moreover, the threat emanating from crime is immediate and it needs to be addressed
immediately, whereas development approaches are a long-term process. In the short term aiming at the
supply of drugs will disproportionately hurt the poor and reinforce many of the causes and effects of the
drug trade.

Targeting the drug trade through military means is another popular policy with little potential for success.
The problem lies in the assumption that the drug trade will disappear if the Taliban, IMU and other political
insurgency groups are defeated. Organized crime, while connected to violence against the state, is not
inimical to it and has its own primarily economic logic and dynamics that must be directly addressed.
Moreover, such approaches have not worked elsewhere including Colombia, particularly because these
groups have the financial and often political support to sustain a war against the state. The difficulty is
compounded by the military realities faced in reconstruction. As a British Colonel in a Provincial
Reconstruction Team (PRT) in Afghanistan testified, their role is peace support, which requires the consent
of local peoples and necessitates the avoidance of conflict with criminal elements, especially when the
number of troops is limited. Moreover, military personnel are not properly trained for the specific
requirements of counter-narcotic operations. Military security and law enforcement, while complimentary,
are distinct, as are organized crime and political insurgency.

Tackling organised crime and mitigating its negative, corrosive impacts on communities, societies and states
has typically been viewed as a law enforcement task. Around the world, fighting organised crime is
primarily the remit of police forces and judicial institutions, which have been supported or sometimes even
supplanted by the military where security conditions have become particularly difficult, such as in Mexico
and Nigeria.

In the past two decades, national governments and regional and international organisations have all
responded to organised crime by conducting threat assessments of varying kinds. However, these “measure
the crime itself, rather than its impact” and “try to capture what is moving [and] how much is moving, [but]
look less at why it is moving along a specific path and who has enabled it” (Global Initiative, 2016: v).

In a mirror image, organised crime control interventions and strategies across the world tend to emphasise
the disruption of illicit markets and the dismantling of criminal groups and networks through law
enforcement means. In this battle, authorities seize all sorts of illicit and licit smuggled commodities every
day—in airports, at border crossings and on board ships, trains, trucks and cars— virtually everywhere in
the world. Every day, people are apprehended by law enforcers and—less often—sentenced by judges for
their involvement in illicit and illegal trades.

Yet, despite the enormous amount of public revenue spent every year on these interventions, we cannot be
sure of their effectiveness. As organised crime expert Jay Albanese observes, "There generally has been a
shocking lack of attention worldwide to documenting and accurately measuring or estimating organized
crime. As one author put it, “organized crime has been defined in the relative absence of knowledge” about
its true dimensions (Castle, 2008, p. 139). Few countries make any effort to systematically count it, measure
changes from year to year, or objectively determine the impact of laws and policies intended to reduce its
incidence. Therefore, organized crime “control” efforts generally occur in a vacuum, so that reasonable
questions such as the following cannot be answered: Has this policy had any impact on organized crime
groups? Has it affected the incidence of organized crime activity? What is the precise cost benefit analysis
of the approaches taken in terms of cost, impact on citizens, markets, and organized crime? The situation is
comparable to marketing a new anticancer drug, but failing to measure in any systematic way whether the
drug actually has any impact on cancer! (Albanese, 2009: 413; see also Castle, 2008)."

The participants who benefit the most economically and who most actively seek to weaken the state
politically are the drug traffickers; they are the most important actors in the drug trade and offer the most
immediate benefits from targeted counter-narcotics efforts. The best option for dealing with them is by
treating them in their proper role: as criminals. Their source of income must be eliminating and they must be
immobilized as actors without directly reinforcing the political and economic grievances of farmers and their
support for anti-state actors. In this regard, intelligence and law enforcement efforts currently underway by
the United States Drug Enforcement Administration and similar projects by the UN Office on Drugs and
Crime (UNODC) are the most valuable contribution to the struggle against drugs and should be stepped up
and more strongly integrated into regional structures. While the need to vastly increase interdiction
capabilities in Afghanistan was emphasized during the International Counter Narcotics Conference on
Afghanistan, including the need for rapid reaction forces and counter-narcotic police, missing from the
recommendations is a vision for regional cooperation.

One approach shared was to recognise and try to reduce the level of political capital that groups had
garnered. The likelihood of success and the strategy to be taken is determined by three interlocking
dimensions: the size of the group’s illicit activities in relation to the overall size of the economy; whether the
industry is labour intensive, and the extent of the interdependence between the criminal and militant arms. In
each case, the strategic response is to increase the level of relevance and social service provision by the state,
whilst shrinking the proportional size of criminal governance. This is, in effect, building a state that people
can relate to and that responds to their needs, providing predictable, sustained and ideally equitable rule of
law, security institutions, justice and dispute resolution, plus economic and development opportunities.

It was observed that given the importance of territorial control to the potency of both criminal and terrorist
groups, the need to carefully address land ownership, management and conflict must be considered. Many of
the terrorist groups discussed had their genesis in dispute over land, and thus how those conflicts and
purported rights are addressed has considerable impact on whether the resolution is positive or results in
longstanding grievances and criminal governance. Efforts to address areas where criminal governance or
terrorist groups are always well entrenched – urban slum communities in gang prevalent areas in Latin
America or Africa were cited as examples – were discussed. A key lesson learned was that efforts to pacify
or clear these areas cannot only be security focused, but need to reinstitute the presence of the state in a
positive manner with a follow-up package of support and engagement.

Greater emphasis needs to be placed on regional intelligence sharing, which can be coordinated through
existing multilateral organizations in the region such as the Shanghai Cooperation Organization, which
focuses on addressing common regional concerns including separatism, terrorism and drug trafficking.66
Moreover, the organization has recently created a Regional Anti-Terrorism Structure for the purpose of
intelligence sharing and coordination, which can easily be extended to include a focus on drug trafficking.
Granted, this is a weak organization with limited experience in cooperation and it has yet to accept
Afghanistan as a member, however with institutional support its efforts to jointly combat regional security
threats including the drug trade can be enhanced.

In this regard, monetary, training and knowledge-sharing technical assistance should be provided to
strengthen the capacity of not only the Afghan government but also other governments and organizations in
the region to effectively gather intelligence on the drug trade and apprehend those individuals involved in
trafficking. Conceptually this requires an expansion of the traditional toolbox for conflict management
beyond traditional military and development instruments to include a greater integration of intelligence and
law-enforcement agencies. This expansion is necessary if proximate causes of state failure and violence,
such as organized crime, which not only feed off of root grievances but also sustain the process of state
collapse and reinforce its incapacity, are to be addressed.
A clear lesson learned that was shared from past approaches was that focusing only on the financial aspects
of illicit trade can have severe consequences for local livelihoods. For example, cutting off the production of
illicit drugs without providing sustainable livelihood alternatives causes greater harm than the illicit trade
itself, and exacerbated the governance/legitimacy vacuum in which terrorist and crime groups thrive. The
expert groups cautioned against unnecessarily criminalising what in fact may be viewed locally as an
informal economy rather than an illicit activity.

It was noted however that, in some cases, hoping to return or create the hegemony of the state may be
impossible, and instead it would be better to work towards a ‘polyarchy of governance’ or ‘hybrid
governance’ where both the state and the crime or terror group can retain its capacity to control certain
territories. In this scenario, however, the goal of interventions should be to achieve the best possible delivery
of that framework, mitigating to the extent possible the worst expressions and impacts of terrorism and
criminality, and to encourage those groups to operate to the maximum extent possible to international
principles.

The importance of addressing gender disparities and dimensions in responses was highlighted. Frequently
strategies to address terrorist groups or criminal gangs focus on the (young) men who are perceived as the
primary protagonists and combatants. Insufficient attention is given to the role of women, the impact on
gender in society (e.g., increases in gender based violence, teenage pregnancies) or to the generational
impact of violence, perceived injustice, and punitive action by the state.

It was observed that while holistic, or all-inclusive responses seem to be preferred to counter specific groups
or their control in certain areas, when in fact, ‘small-pocket’ and incremental approaches may prove more
effective. Often timing is important – a situation may be intractable at first, but small windows of
opportunity may present themselves which need to be seized. However, the question remains on how to
ensure the necessary monitoring that would allow those strategic opportunities to be identified, and to ensure
that the international or national policy framework is in place to allow timely action.

In regards to the actors best placed to respond, it was broadly observed how challenged the multilateral
system was to engage in this environment. The level of state complicity in crime (as observed by Shelley’s
Holy Trinity model), and the often competitive or controversial relationship that states have with terrorist
groups both nationally and regionally, can make it challenging to agree on mutual courses of multilateral
action. It was suggested that the way forward may have to be modular approaches to multilateralism, or
looser coalitions that are formed outside of the formal multilateral system. These suggestions have been used
to good effect in the cases of the Global Counter-Terrorism Forum (GCTF) or in the Contact Group to
Counter Piracy off the Coast of Somalia (CGPCS), which was particularly notable for its inclusion of the
private sector.

Perhaps more important than international and multilateral action, the critical importance of achieving
community level ownership and buy-in was heavily emphasised. While there are many challenges to
achieving this effectively and delivering over the long-term against short-term expectations, the discussions
emphasised that without community engagement there can be little hope of success.

In conclusion, however, there must be a mutual understanding that addressing the organised crime and terror
nexus as a governance paradigm is a long-term endeavour, with many iterations required, and one in which
we have few positive examples of success. There was a general sense that not enough is known on how to
effectively rebuild governance, the rule of law and the social compact, and that our toolbox of responses
seem poorly designed for the task.

The following section provides a number of recommendations for the development of interventions that are
specifically tailored to tackle the OC-Terrorism phenomenon.

I. Preventing the formation of the nexus

In Europe, reservoirs of discontent and alienation among populations may make terrorism and/or organised
crime seem like attractive and viable options. The continent continues to see a large influx of migrants with
expectations of building better lives in their new homes. Many times such expectations are met with
disappointment and an inability to integrate into local communities. At the same time, domestic expectations
and the rise of right-wing extremism have fuelled an environment of intolerance.

A combination of both macro, meso and micro factors, as well as a lack of sufficient State action that
addresses these justifications and drivers (through education, economic and other initiatives), may lead
dissatisfied and vulnerable individuals to seek inclusion, status and capital through criminal and terrorist
means. As discussed earlier, this can be witnessed by the growing trend of non-organised criminals carrying
out terrorist attacks (as seen in Paris and Belgium attacks). As criminals, these groups are already outlaws in
society, making them easier to be identified, radicalised and recruited as terrorists. Moreover, such
individuals already have means to fund terrorist activities by committing crimes.

To address this phenomenon, policy makers and practitioners will be required to move beyond traditional
law enforcement methods to adopt a more nuanced, phased and multi-sector approach. This means firstly
analysing and responding to the similarities and distinctions between the enabling macro factors in which
criminality and terrorism are more likely to result; identifying, monitoring and mitigating the meso
dynamics which serve to exacerbate vulnerabilities and create ‘prevailing winds,’ which increase the
likelihood of terrorism and organised crime occurring and converging, and finally by recognising the types
of catalytic triggers, or micro conditions, which may prove the tipping point in an individual’s decision-
making calculus and follow-on actions.

This is indicatively laid out in the table below:

What the above analysis highlights is a set of vulnerabilities and motivations that incline towards criminal
and terrorist groups and acts, which have a degree of similarity but also important differences. Policymakers
or state officials acting within a remit where one or numerous of these factors are present could use the
above condition as a guide, and monitor potentially vulnerable populations and individuals for the types of
catalytic micro level acts that would ‘tip the balance’ between criminality and/or radicalisation. Addressing
these vulnerabilities would allow for a preventive approach to recruitment of individuals to either crime or
terror groups, and to specifically prevent the convergence of the two groups.

Efforts underway by the international community to address root causes of violent extremism and
radicalisation come closer to addressing the socio-political underpinnings of the organised crime and
terrorism nexus. For example, inter alia, the UN developed a Comprehensive Plan of Action to Prevent
Violent Extremism in 2015, calling for a comprehensive approach that encompasses not only essential
security-based measures but also systematic preventive steps to address the underlying conditions that drive
individuals to become radicalised. In the same year, the Club de Madrid (CdM), along with International
Centre for the Study of Radicalisation (ICSR), hosted a Policy Dialogue to confront and prevent
radicalisation and violent extremism. The Policy Dialogue developed a framework document called
“#GlobalConsensus”, presenting key principles and recommendations in the pursuit of a global consensus on
preventing and countering violent extremism, domestically and internationally. The document covers a
number of issues including good governance, inclusion, education, the resolution of unresolved conflicts and
community mobilisation.

While such initiatives can be said to be broadly applicable to the organised crime context, very little analysis
or evaluation has been applied to establish whether or not these types of programmes are in fact effective on
the nexus. Those focused on the study of organised crime and the means by which criminals develop
suggest that there are number of recruitment schemes, including the graduation from petty crime into
commodities and acts of higher value and criminality.

II. Breaking the Organised Crime and Terror Nexus

Beyond the issue of recruitment, addressed above, by far the majority of responses targeted at the organised
crime and terrorism nexus are focused at breaking that relationship once it is in place, and there is sufficient
evidence or suspicion that terrorist groups are benefitting from criminal financing or infrastructure.

The literature and responses around countering the financing of terrorism (CFT), which is often coupled
strategically with those to prevent money laundering (AML and AML/CFT), is advanced and well
documented with extensive guidance for financial institutions, law enforcement bodies, global and national
regulators and states to follow and oversee. These are, however, far more comprehensive and effective for
those CFT contexts where money is moved through the financial system. As a growing number of FATF
reports have acknowledged, an increasing amount of money is moving through the informal ‘hawala’
financial system, or through non-traditional means such as through crypto-currencies, money value transfer,
trade mispricing, or even social media channels and networks.

There has been little or no programmatic interventions of which we are aware that address the ability of
local groups to extort or tax local populations, businesses and revenue flows, which have been identified in
the case studies as being a major means by which contemporary terrorist groups raise funds. While there has
been some limited work on breaking cycles of criminal extortion and mafia style behaviour, this is becoming
an acute challenge in a number of parts of the world, to which the level of responses have largely failed to
keep pace. It is arguably the case that approaches to break criminal extortion may also be applicable in cases
where terrorist groups also levy protection taxes to resource their causes.

As previously observed, terrorist groups also benefit and utilise the logistical capabilities and services
offered by criminal groups, for example accessing travel and transport logistics and fraudulent
documentation. Beyond anecdotal evidence offered, there has been no systematic study that we are aware of
that have examined specifically what would cause or prevent a criminal group offering their services to a
terrorist organisation. Furthermore, it is debatable whether this form of technical service provision
represents the strategic alliance of criminal and terrorist organisations that the ‘nexus’ concept is meant to
convey.

Overall, and as previously noted, what the responses have largely overlooked is the social and economic
capital and legitimacy that crime/terrorist groups have managed to garner with their local communities, and
for which technical responses are poorly fit for purpose. At the point in which crime/terrorist groups are
presenting an alternative governance model, the strategic response would need to be tailored at breaking
down their influence and rebuilding that of a legitimate state into the vacuum. Lessons learned in the FARC
peace process in Colombia would be instructive in this regard.

There are a number of officially sponsored initiatives currently underway which seek to understand and
combat organized crime and terrorism. The South-eastern European Cooperative Initiative (SECI) Centre is
a multinational organization based in Bucharest, Romania that supports common trans-border crime fighting
efforts of participating countries. The SECI Centre has an Anti-Terrorism Task Force that helps member
states counter the nexus of organized crime and terrorism. This is a reflection of how the phenomenon of
transformation and convergence has metastasized in the Balkans. A recent meeting with Montenegrin
officials indicated that regional responses are the only hope for fighting the combined scourge of terrorism
and crime. The area of the former Yugoslavia and its neighboring states sit abreast a pipeline of people and
contraband coming from Eastern Europe Central Asia, the Middle East, Russia, and North Africa on its way
to western Europe. With weak economies, corrupt governments, poorly equipped, underpaid border guards
and little regard for boundaries, it is easy to see how the nexus has developed so quickly in this part of the
world. Human trafficking has risen in public awareness in recent months as stories of women and children
numbering in the hundreds of thousands are moved through this region every year and are forced into
prostitution. Unfortunately, many leaders both in the United States and in Europe have failed to recognize
human trafficking as part of a larger, more complex security threat. One plausible scenario under
consideration is that of a vehicle transiting the Balkans with Moldovan women destined for prostitution—
a human cargo that could just as easily be narcotics, a nuclear artillery shell, WMD precursor materials,
or an al Qaeda member.

The United Nations is also engaged in addressing the links between organized crime and terrorism. The
Vienna-based U.N. Office of Drugs and Crime works through its Global Programme on Terrorism and its
Global Programme against Transnational Organized Crime to assist member nations in combating both
threats. This assistance is offered, among other means, by strengthening the ability of customs officials,
immigration officers, and border guards to counter trafficking in narcotics, human beings, vehicles, and
weapons—all of which are directly relevant to effective terrorist operations, financing and organization.

Additionally, the International Criminal Police Organization (INTERPOL) based in Lyon, France, has
created the Fusion Task Force to address linkages between organized crime and terrorism. Among other
things, the Fusion Task Force analyzes data on criminal and terrorist organizations in order to “develop
target packages . . . to facilitate the disruption and dismantling of criminal entities that play a central role in
the funding or support of terrorist activities [including] drug trafficking, money laundering and other forms
of financial crime, extortion, armed robberies, kidnappings, revolutionary taxes, and weapons trafficking.”
However, with a $33 million annual budget for the entire INTERPOL organization serving 181 countries,
the Fusion Task Force is glaringly under-funded.

Generally speaking, terrorist and organized crime groups are more responsive and agile than the
governments and multilateral organizations which pursue them. Rapid re-calibration of law enforcement
procedures and tactics are vital if anti-terror, anticrime efforts are to succeed. Terrorist and organized crime
groups are unencumbered by official rules of engagement and can copy one another’s best practices to stay
one step ahead of law enforcement. Thus, as the walls between criminals and terrorists come down, so too
must some of the walls between law enforcement and intelligence. If a terrorist group is engaged in narcotics
trafficking, the United States, or any nation for that matter, should not fail to share information between
agencies that are tracking a group that engages in both terrorism and organized crime.

In the field however, this task has proven easier said than done. U.S. forces in Afghanistan have found that
the political and practical realities of tactical counterterrorism operations may inhibit efforts to stop the
nexus of organized crime and terrorism. A U.S. military official was recently quoted as saying: “We’re on
an operational mission here against al-Qaeda and the Taliban. A lot of that relies on the goodwill of local
warlords and their men supplying us with intelligence and sometimes manpower.” He added, “That goodwill
is going to diminish if we suddenly start trashing their poppy crops and burning their opium warehouses. It
is imperative that this threat must not be seen as two separate issues. When senior Pakistani officials raised
the subject of counter-drug operations with the top U.S. authorities, including the former CENTCOM
commander General Tommy Franks, they were told that the mandate given to the U.S. military was to wipe
out terrorism from the region, and not drugs.14 While this may be a better tactical decision for the short term,
affording criminal elements the tacit approval of U.S. forces will only encourage their narcotics smuggling.
Terror groups and their allies might then one day take over this well-cultivated, “sanctioned” crime.

A three-pronged approach to control both drugs and crime

What to do then? Resources available to national authorities are finite and, particularly in this period of
economic difficulties, increases in health and security budgets cannot be expected. We can start by framing
our collective efforts against drugs less like a war, and more like an effort to cure a social illness. By way of
metaphor, let us say that the world is afflicted with drug addiction (the disease) and the drug control system
(the cure) has had an unintended side effect: a huge criminal drug market. Implementation of the proposals
contained in this paper is less dependent on availability of financial capital, and much more on committing
political capital. This paper proposes a three-pronged approach consisting of:
 Prong 1: a control strategy for each market
 Prong 2: a resistance platform for each community
 Prong 3: a shared commitment among nations

(1) A control strategy for each market

Measures to control drugs must be conceived as part of an integrated strategy, targeted and timed to treat
causes, not symptoms, and to achieve maximum impact with minimal side-effects. Each drug market –
understood as the chain that links producers, traffickers and consumers – needs specific interventions. The
alternative is a patch-work, with disjointed actions that displace the problem (among countries and/or across
substances), address only aspects of it (the crime of drug crops, rather than the poverty of farmers), or use a
hammer where a chisel would work better (criminalizing addiction, rather than treating each addict). The
illicit drugs economy consists of many actors, each responding to their own sets of incentives. To design
countermeasures, we need to understand each link in the chain, while not forgetting that it is, in fact, a chain
that binds together actors across: (i) regions, as well as (ii) markets, and the response must be (iii) drug
specific and (iv) time sensitive.

The need for an integrated strategy. Crime control measures must integrate all elements of the drug chain:
supply, trade and demand. So far governments have mostly pursued disjointed interventions that have
displaced the problem (from one country to another and/or from one substance to another); have addressed
only some aspects (fighting illicit crops, instead of mass poverty); or have used a sledge-hammer instead of
a more appropriate chisel (criminalizing addiction, instead of treating addicts). Also measures have been
incoherently applied over time (with uneven political commitment), and over space (without the
coordination promoted by international agreements). For example, the UN legal instrument against
Organized Crime and its protocol on Fire Arms provide platforms for joint, rapid-impact action: yet, they
not been implemented in a way robust enough to impact the drug trade. As a result, a number of countries
now face a crime situation largely caused by their own choice. This is bad enough. Worse is the fact that,
quite often their vulnerable neighbours pay an even greater price.

(2) A resistance platform for communities

The drug trade tends to infect societies through open wounds: derelict neighbourhoods and out-of-control
regions run by war/drug-lords. Situational crime prevention instruments can heal these wounds and make
them inhospitable to the drug barons. The emphasis in each case is to regain control over marginalized areas,
to draw them in, rather than push them out of society.

Arrests and seizures are necessary, but insufficient. The principle behind them is to incapacitate offenders
and to deter potential ones. But this is fruitless when social conditions continue to generate whole new
classes of people with strong incentives to offend. Those willing to risk death by ingesting a kilogram of
condom-wrapped cocaine pellets (for a few thousands dollars), are not put off by the risk of jail. While the
threat of arrest must remain in place to dissuade those who value their future, those who have given up hope
are not frightened.

There is a law enforcement corollary to this. While mafia families capable of mobilizing hundreds of
millions of dollars of assets are well protected by thick walls, electronic surveillance and heavily armed
thugs, they can mobilize legions of recruits to do the dirty work of moving the drugs across borders, storing
it in safe houses, gathering the proceeds from retailers, as well as acting as killers to stop the competition.
Life expectancy of these, mostly young recruits may be short – but “what’s the alternative?” they retort,
keeping in mind their miserable background in city ghettos or poor villages – often orphans, illiterate and
certainly unemployed.

Drug control policies must recognize that degradation, underdevelopment and joblessness create a condition
of vulnerability to both the drug use and the drug trade that requires unmitigated attention – or law
enforcement will perpetually chase its own tail around the globe. Gang members, whose whole life revolves
around conflict with the police, value prison as an expected part of the life cycle, and see death as a price to
be paid for posthumous respect. Arrests and seizures do not have a lasting impact on them: as an economist
would say, the supply of such foot-soldiers is totally elastic. Therefore, governments have to try something
else – and new.

The need for community resistance. Drugs infect especially certain segments of society. Ghettos, even
entire regions controlled by crime cartels, are breeding grounds of both drug supply (trafficking) and
demand (addiction). Exploitation, instability, even terrorism are their direct cause and consequence. Yet, like
addiction, violence can be cured: it is indeed possible to regain control of places that today are hospitable
only to anti-social behaviours. The challenge is to re-integrate marginalized segments of society and draw
them into, rather than push them out of the law. From the Andes to South East Asia, this has been done with
farmers who have been assisted to switch from illicit to licit crops – despite the war conditions surrounding
them. From Europe to Australia this has been done with addicts who have been helped to abandon their drug
dependence – despite largely adverse social settings. The world over, drug farmers and drug addicts have
benefited from targeted assistance: why not duplicate this winning model in the heart of ghettos and in areas
out-of-control? Why do states abandon masses of unemployed, illiterate youth that face no other option than
a day of money, notoriety and death as foot-soldiers in rag-tag armies of mafias and rebels?

(3) Resistance mechanisms shared among nations

Just as we must build community resistance, we must help states to share efforts against the incursion of
drug traffickers on an institutional level. We have made great progress in reducing the number of safe
havens for transnational criminals, but more needs to be done, especially in supporting fragile states. The
United Nations Convention against Transnational Organised Crime (UNTOC) has established the legislative
framework to address the crime business, and build the mechanisms for international cooperation. But there
are large gaps in its ratification and in the implementation of its provisions. The international community
does not seem to be taking its own instrument seriously. Many countries have passed legislation of sort, but
rarely use it. This may be one reason why several UNTOC Conferences of the Parties could not agree to
peer monitoring. Countries cannot even agree to providing (and sharing) basic data on these issues, so great
is the fear of dropping the fig leaf; when delegates from Member States meet to discuss the world crime
situation, they have little idea if the problem is getting better or worse, where and why: this is decision-
making in a permanent, thick fog. And of course drug control gets a bad reputation, for having caused an
unintended consequence – transnational crime – that few countries seem to recognize as actually their own
doing.

The lack of concerted work on money laundering represents another lost opportunity. The global financial
crisis has rolled back many of the gains made during the 1990s. Why? Because banks need liquidity and ask
fewer questions now about where money originates. Again, many instruments are in place. Others, designed
to prevent money-laundering that takes place in the real economy, are badly needed. Above all what is
needed is the political will and the corporate responsibility to use them. The size of the criminal economy is
as much a product of our collective inaction to identify/seize the assets of drug barons as a side effect of
drug control. The end result is growing frustration among honest citizens, who see the expensive cars, yachts
and mansions of untouchable mafias and their cronies, and wonder why these illicit proceeds are not seized
– at a time when the growing economic depression bites away honest jobs and hard-won assets.

The same is true in the area of corruption. By providing criminals with virtual immunity from prosecution,
corruption can nullify the deterrence effect stemming from drug enforcement. In adopting the United
Convention against Corruption, Member States have equipped themselves with a powerful instrument to
remove an essential lubricant of criminal markets. But, despite the fact that the Convention entered into
force four years ago and has already been ratified by more than 120 countries, efforts have fallen short of
potentials when it comes to concrete actions. A modest (pilot) monitoring process was launched in 2006
after much controversy. So far the Conferences of the States Parties have been, as with the sister convention
(UNTOC), a disappointment – with negotiators once again lost in debating processes at a time when the
criminals prosper because of corruption in public places, and the financial system is penetrated by white-
collar (bourgeois) mafias
The need for a shared commitment. The drug trade not only infects people in so many lands. It also
corrupts governments, together with business and finance. Nations need to strengthen integrity in
governance (public and private) and resistance to drug cartels, armed with war chests worth billions of
dollars. This is not happening. Money laundering is rampant and practically unopposed: honest citizens,
seeing the expensive cars, yachts and mansions of untouchable mafias and their cronies, wonder why
proceeds of crime are not seized. The internet supplies drugs, arms, even people and their organs, on-line.
One of humanity’s biggest capital assets, the web, when perversely used is turned into a weapon by
criminals and terrorists. Surprisingly, calls for international agreements against cyber-crime and cyber-
terrorism remain un-answered. Even existing international legal instruments are not adequately applied,
their rules of engagement not yet agreed upon years after their entry into force. In fact, the Conferences of
the Parties for the implementation of the UN Conventions against Corruption and against Organized Crime
have repetitively failed to deliver – focussed on processes rather than on the substance of fighting organized
crime.

The drug control conventions – so effective in reducing the health impact of illicit substances – are under
attack for a collateral damage the founding fathers could not anticipate: the emergence of drug cartels
powerful enough to affect politics and business. This may be an unintended consequence of the drug
conventions: above all, it is the inescapable result of inadequate implementation of existing crime control
agreements and unwillingness to develop new ones, despite the sacrifice – often the ultimate sacrifice – of
law enforcement officers.

Implementation of the strategy - a look at the US policy to

tackle - TOC-terrorism nexus devised by NSA

The Strategy to Combat Transnational Organized Crime applies all elements of national power to protect
citizens and national security interests from the convergence of 21st century transnational criminal threats.
This Strategy is organized around a single unifying principle: to build, balance, and integrate the tools of
state power to combat transnational organized crime and related threats to national security—and to urge our
foreign partners to do the same. The end-state we seek is to reduce transnational organized crime (TOC)
from a national security threat to a manageable public safety problem in the country and in strategic regions
around the world. The Strategy will achieve this end-state by pursuing five key policy objectives:

1. Protect citizens and our allies from the harm, violence, and exploitation of transnational criminal
networks.
2. Help allied countries strengthen governance and transparency, break the corruptive power of transnational
criminal networks, and sever state-crime alliances.
3. Break the economic power of transnational criminal networks and protect strategic markets and the
financial system from TOC penetration and abuse.
4. Defeat transnational criminal networks that pose the greatest threat to national security by targeting their
infrastructures, depriving them of their enabling means, and preventing the criminal facilitation of
terrorist activities.
5. Build international consensus, multilateral cooperation, and public-private partnerships to defeat
transnational organized crime.
The Strategy also introduces new and innovative capabilities and tools, which will be accomplished by
prioritizing within the resources available to affected departments and agencies.

A new rewards program will replicate the success of narcotics rewards programs in obtaining information
that leads to the arrest and conviction of the leaders of transnational criminal organizations that pose the
greatest threats to national security.
An interagency Threat Mitigation Working Group will identify those TOC networks that present a
sufficiently high national security risk and will ensure the coordination of all elements of national power to
combat them.
While this Strategy is intended to assist the Government in combating transnational crime, it also serves as
an invitation for enhanced international cooperation. We encourage our partners and allies to echo the
commitment we have made here and join in building a new framework for international cooperation to
protect all our citizens from the violence, harm, and exploitation wrought by transnational organized crime.

Despite a long and successful history of dismantling criminal organizations and developing common
international standards for cooperation against transnational organized crime, not all of our capabilities have
kept pace with the expansion of 21st century transnational criminal threats. Therefore, this strategy is
organized around a single, unifying principle: to build, balance, and integrate the tools of state power to
combat transnational organized crime and related threats to our national security – and to urge our
partners to do the same. To this end, this strategy sets out 56 priority actions, starting with ones the country
can take within its own borders to lessen the impact of transnational crime domestically and on our foreign
partners. Other actions seek to enhance our intelligence, protect the financial system and strategic markets,
strengthen interdiction, investigations, and prosecutions, disrupt the drug trade and its facilitation of other
transnational threats, and build international cooperation.

Introduction

“Combating transnational criminal and trafficking networks requires a multidimensional strategy that
safeguards citizens, breaks the financial strength of criminal and terrorist networks, disrupts illicit
trafficking networks, defeats transnational criminal organizations, fights government corruption,
strengthens the rule of law, bolsters judicial systems, and improves transparency. While these are major
challenges, the United States will be able to devise and execute a collective strategy with other nations
facing the same threats.”

— National Security Strategy, May 2010

In January 2010, the United States Government completed a comprehensive review of international
organized crime—the first on this topic since 1995. Based on the review and subsequent reporting,
the Administration has concluded that, in the intervening years, international—or transnational—
organized crime has expanded dramatically in size, scope, and influence and that it poses a significant
threat to national and international security. In light of the review’s findings, we have adopted the term
“transnational organized crime” (TOC) to describe the threats addressed by this Strategy.

While the term “international organized crime” has been commonly used in the past, “transnational
organized crime” more accurately describes the converging threats we face today. As emphasized in
the National Security Strategy: “…these threats cross borders and undermine the stability of nations,
subverting government institutions through corruption and harming citizens worldwide.”

In years past, TOC was largely regional in scope, hierarchically structured, and had only occasional links
to terrorism. Today’s criminal networks are fluid, striking new alliances with other networks around the
world and engaging in a wide range of illicit activities, including cybercrime and providing support
for terrorism. Virtually every transnational criminal organization and its enterprises are connected and
enabled by information systems technologies, making cybercrime a substantially more important
concern. TOC threatens national interests by taking advantage of failed states or contested spaces; forging
alliances with corrupt foreign government officials and some foreign intelligence services; destabilizing
political, financial, and security institutions in fragile states; undermining competition in world strategic
markets; using cyber technologies and other methods to perpetrate sophisticated frauds; creating the
potential for the transfer of weapons of mass destruction (WMD) to terrorists; and expanding narco
trafficking and human and weapons smuggling networks. Terrorists and insurgents increasingly are turning
to criminal networks to generate funding and acquire logistical support. TOC also threatens the
interconnected trading, transportation, and transactional systems that move people and commerce
throughout the global economy and across our borders.

In October 2010, the national security advisors of 44 nations gathered in Sochi, Russia to discuss
transnational crime. Representing the United States, former National Security Advisor General James L.
Jones, USMC, Ret. warned of the TOC threats to international security and urged immediate international
action, saying:

“In a world full of transnational threats, transnational crime is in an ascendant phase… This lethal
nexus of organized crime, narco-trafficking, and terrorism is a threat that the United States, Russia
and all of us share and should be working together to combat… Today, right now, we have an
opportunity for cooperation not just between the United States and Russia, but among all nations
represented here today. It’s up to us to seize the moment…”

The various elements of this Strategy flow from a single unifying principle: we will build, balance, and
integrate the tools of state power to combat TOC and related threats to national security and urge our
foreign partners to do the same. To this end, the Strategy recognizes TOC as a significant threat to national
and international security and emphasizes planning, priorities, and activities accordingly.
The Strategy addresses TOC and drug trafficking as increasingly intertwined threats to maximize the impact
on resources. It also provides a framework to direct state power against those TOC actors, activities, and
networks that are determined to pose the greatest threat to national and international security.
This Strategy establishes priority actions in several key areas. It starts by taking a hard look at what actions
the States can take within its own borders to lessen the threat and impact of TOC domestically and on
foreign partners.

The other priority actions seek to:

 Enhance Intelligence and Information Sharing;
 Protect the Financial System and Strategic Markets Against Transnational Organized Crime;
 Strengthen Interdiction, Investigations, and Prosecutions;
 Disrupt Drug Trafficking and Its Facilitation of Other Transnational Threats; and Build International
Capacity, Cooperation, and Partnerships

Enhance Intelligence and Information Sharing

A shift in U.S. intelligence collection priorities since the September 11, 2001 attacks left significant gaps in
TOC-related intelligence. Meanwhile, the TOC threat has worsened and grown in complexity over the past
15 years. The fluid nature of TOC networks, which includes the use of criminal facilitators, makes targeting
TOC increasingly difficult.

Enhancing U.S. intelligence collection, analysis, and counterintelligence on TOC is a necessary first step,
but should be accompanied by collaboration with law enforcement authorities at Federal, State, local, tribal,
and territorial levels and enhanced sharing with foreign counterparts. We will also supplement our
understanding of TOC involvement in licit commercial sectors to better enable policymakers to develop
specific interventions. Our aim is enhanced intelligence that is broad-based and centered on substan- tially
upgraded signals intelligence (SIGINT), human intelligence (HUMINT) and open sources intelligence
(OSINT). This effort will be aided through greater information sharing with foreign partners and closer
cooperation among intelligence, law enforcement, and other applicable agencies domestically.

We will augment our intelligence in step with the new TOC threats described previously. The
Administration will review its current intelligence priorities, including the National Intelligence Priorities
Framework, and determine how best to enhance our intelligence against the highest-level TOC threats to
national security. Priorities will include:

 Enhancing SIGINT and HUMINT collection on TOC threats, especially taking into account the
potential role of TOC to facilitate WMD terrorism;
 Employing the Open Source Centre to draw upon “grey” literature, smaller press outlets that cover
crime in foreign countries, and social media fora to develop profiles of individuals, com- panies, and
institutions linked to TOC networks;
 Coordinating with the interagency International Organized Crime Intelligence and Operations Center
(IOC-2) to utilize existing resources and databases of the Organized Crime Drug Enforcement Task
Force (OCDETF) Fusion Centre (OFC) and SOD to share intelligence, de-conflict operations, and
produce actionable leads for investigators and prosecutors working nationwide;
 Expanding collection and immigration, customs, transportation, and critical infrastructure screening
capabilities in TOC “hotspots” around the world;
 Developing protocols to ensure appropriate TOC data flows to agencies conducting screening and
interdiction operations to disrupt TOC activities at the border and at critical points of the supply chain;
 Using specialized intelligence centres such as the El Paso Intelligence Centre, the Bulk Cash
Smuggling Centre, the National Export Enforcement Coordination Centre, and the Cyber Crimes
Centre to coordinate the collection and analysis of intelligence regarding various aspects of the TOC
threat;
 Using the National Intellectual Property Rights Coordination Centre, an interagency and inter- national
law enforcement task force established in 2000 and led by ICE, to assist with combating intellectual
property theft and maintaining the integrity of public health, public safety, the military, and the U.S.
economy; and
 Enhancing Department of Defence support to U.S. law enforcement through the Narcotics and
Transnational Crime Support Centre.
Actions
A. Enhance U.S. intelligence collection, analysis, and counterintelligence on TOC entities that pose the
greatest threat to national security.
B. Develop greater synergies between intelligence analysts, collectors, and counterintelligence personnel;
ensure their efforts directly support operational law enforcement needs and screening requirements.
C. Strengthen ties among U.S. intelligence and counterintelligence, law enforcement, and military enti- ties,
while strengthening cooperation with international intelligence and law enforcement partners.
D. Develop and foster stronger law enforcement and Intelligence Community relationships among Federal,
State, local, tribal, and territorial authorities.
E. Support multilateral senior law enforcement exchanges to promote the sharing of criminal intel- ligence
and enhance cooperation, such as the “Quintet of Attorneys-General” and the “Strategic Alliance Group”
fora established with the United Kingdom, Canada, New Zealand, and Australia.
F. Update the National Intelligence Priorities Framework to ensure that it is aligned with current TOC
threats.
G. Enhance support to Intelligence Community analysis of TOC by the Office of the Director of National
Intelligence, specifically by the National Intelligence Council and the National Intelligence Managers.
H. The National Counter-proliferation Centre shall develop a plan that assesses the links between TOC and
WMD proliferators.
I. Establish a comprehensive and proactive information-sharing mechanism to identify TOC actors and
exclude them from the United States or uncover them within the United States.

Information sharing to combat transnational organized crime

The Special Operations Division

Established in 1994, the Special Operations Division (SOD) is a DEA-led multi-agency operations
coordination center with participation from Federal law enforcement agencies, the Department of Defense,
the Intelligence Community, and international law enforcement partners. SOD’s mission is to establish
strategies and operations to dismantle national and international trafficking organizations by attacking their
command and control communications. Special emphasis is placed on those major drug trafficking and
narco-terrorism organizations that operate across jurisdictional boundaries on a regional, national, and
international level. SOD provides foreign- and domestic-based law enforcement agents with timely
investigative information that enables them to fully exploit Federal law enforcement’s investigative author-
ity under Title III of the U.S. Code. SOD coordinates overlapping investigations, ensuring that tactical and
operational intelligence is shared among law enforcement agencies.

The Organized Crime Drug Enforcement Task Force Fusion Center

Created in June 2006, the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center (OFC)
serves as a central data warehouse for drug intelligence, financial intelligence, and related investigative
information, and is designed to conduct cross-agency integration and analysis of such data with a view to
creating comprehensive intelligence pictures of targeted organizations, including those identified as
Consolidated Priority Organization Targets—the United States’ most wanted international drug and money
laundering targets. The OFC provides agencies with operational human and financial intelligence, and is
staffed with agents and analysts detailed from 14 participating investigative agencies. These personnel
conduct analysis to produce investigative leads, develop target profiles, and identify links between drug
organizations and other criminal activity in support of drug investigations.

The International Organized Crime Intelligence and Operations Center

In May 2009, Attorney General Eric Holder announced the establishment of the International Organized
Crime Intelligence and Operations Center (IOC-2), an entity that marshals the resources and information of
U.S. law enforcement agencies and Federal prosecutors to collectively combat the threats posed by inter-
national criminal organizations. Understanding that international criminal organizations are profit-driven,
IOC-2 also works with investigators and prosecutors to target the criminal proceeds and assets of inter-
national criminal organizations. In recognition of the demonstrated interrelationship between criminal
organizations that engage in illicit drug trafficking and those that engage in international organized crime
involving a broader range of criminal activity, IOC-2 works in close partnership with the OFC and SOD.

The Bulk Cash Smuggling Center

ICE established the National Bulk Cash Smuggling Center (BCSC) in 2009 to combat bulk cash smuggling.
The BCSC is an operations support facility providing real-time investigative assistance to the Federal, State,
and local officers involved in enforcement and interdiction of bulk cash smuggling and the transportation of
illicit proceeds. The BCSC is partnered with the El Paso Intelligence Center to further identify and target the
financial infrastructure of drug trafficking organizations. These organizations seek to avoid traditional
financial institutions by repatriating illicit proceeds through commercial and private aircraft, passenger and
commercial vehicles, maritime vessels, and pedestrians crossing at our U.S. land borders. These combined
interagency efforts, successful financial investigations, Bank Secrecy Act requirements, and anti-money
laundering compliance by financial institutions has strengthened formal financial systems and forced
criminal organizations to seek other means to transport illicit funds across our borders.

The EPIC Border Intelligence Fusion Section

The El Paso Intelligence Center (EPIC), managed by the DEA, was established in 1974 to support
enforcement efforts against drug and alien smuggling along the Southwest border. EPIC has grown over
time to better support Federal, State, local and tribal law enforcement. The DHS Office of Intelligence and
Analysis established the Border Intelligence Fusion Section (BIFS) at EPIC in November 2010 with the
objective of providing U.S. law enforcement, border enforcement, and investigative agencies with multi-
source intel- ligence and law enforcement information to support investigations, interdictions, and other law
enforce- ment operations related to the Southwest border. The BIFS is a joint, collaborative effort of the
Department of Homeland Security, Department of Justice, Department of Defense, and partners in the
Intelligence Community and, as a multi-source/all threats intelligence section at EPIC, the BIFS will access
and analyze intelligence and information received by and developed at EPIC in order to produce a common
intelligence picture and common operating picture.
Strengthen Interdiction, Investigations, and Prosecutions
This Strategy sets priorities and objectives to help law enforcement and other applicable agencies at the
Federal, State, local, territorial and tribal levels work together in a collaborative manner to target TOC
networks—their leaders as well as their enabling means and infrastructure—in the United States and abroad.
It is equally important that we build strong working relationships with our international partners to
harmonize our efforts, and to ensure that they have the capabilities and regulatory and legislative
frameworks to prevent, reduce, and eliminate TOC threats.

Building upon the improved information sharing described earlier, the United States will leverage
consolidated TOC databases to provide more accurate intelligence on known TOC members and their
associates so they can more easily be denied entry to the United States or access to lawful immigration
status, employment, or secure facilities.

This Strategy pursues TOC through criminal investigations and interdiction focused on both the net- works
and their leadership. Criminal investigations will use an integrated approach that incorporates financial,
weapons, and TOC-related corruption investigations into a comprehensive attack on the entire criminal
organization. Interdiction efforts will focus on depriving TOC networks of their products, proceeds,
infrastructure, and enabling means. The use of multi-agency task forces such as the ICE-led Border
Enforcement Security Task Forces will remain essential to our efforts to investigate and interdict TOC
threats at our borders.

To address recent TOC trends, the Administration will work with Congress on a range of legislative
solutions to allow or enhance the prosecution of TOC enterprises and significant TOC activity that affects
the United States. We will also enhance our anti-money laundering and forfeiture authorities to target TOC
networks that pose threats to national and international security.

Actions
A. Work with Congress to enhance U.S. authorities to identify, investigate, interdict, and prosecute top
transnational criminal networks.
B. Utilize rewards programs to assist in gathering information leading to the arrest or conviction of top
transnational criminals.
C. Issue a new Presidential Proclamation under the Immigration and Nationality Act to refuse visas/ deny
entry to TOC-affiliated aliens, corrupt foreign officials, and other persons designated for finan- cial
sanctions pursuant to the International Emergency Economic Powers Act.
D. Develop a strategy that denies TOC networks and individuals in the United States access to their
infrastructure and their enabling means.
E. Deny visas to TOC members and associates and capture top TOC figures who take refuge in the United
States or partner countries.
F. Fully integrate financial, weapons, and TOC-related corruption investigations into comprehensive
organizational attack activities and operations.
G. Strengthen cooperation with international police organizations, such as Interpol, Europol, Ameripol, and
the International Association of Chiefs of Police (IACP), to facilitate cross-border police cooperation.
H. Strengthen efforts to interdict illicit trafficking in the air and maritime domains.
I. Develop and implement a whole-of-government plan to counter kidnapping for ransom in order to disrupt
the funding for terrorists, pirates, and other bad actors.
J. Deny TOC access to secure facilities and locations.

The U.S. Secret Service’s Cyber Intelligence Efforts

The U.S. Secret Service leverages technology and information obtained through private partnerships to
monitor developing technologies and trends in the financial payments industry. The information obtained is
used to enhance the U.S. Secret Service’s capabilities to prevent and mitigate attacks against the financial
and telecommunications infrastructures. This approach to intelligence collection and sharing has resulted in
the successful apprehension of individuals charged with committing some of the world’s most advanced
cybercrimes during such investigations as those of the Heartland and TJX Intrusions, Maksym Yastremskey,
Albert Gonzalez, and others. In FY 2010, the U.S. Secret Service arrested 1,217 suspects for cybercrime
related violations, with a fraud loss of $507 million.

Defending U.S. Borders against TOC

In 2006, amidst rising crime on the Southwest border, ICE and CBP worked with other Federal, State, local,
and foreign partners to establish the Border Enforcement Security Task Force (BEST), designed to attack
TOC networks that exploit our borders and threaten the American public. Since then, this initiative has
grown to 21 BESTs arrayed along the Southwest and Northern borders as well as at major seaports. These
BESTs have seized more than 36,000 pounds of cocaine, 550 pounds of heroin, 485,000 pounds of
marijuana, 4,300 weapons, and $68 million, and led to the arrests of 5,910 individuals.

Disrupt Drug Trafficking and Its Facilitation of Other Transnational

Threats
In recent years, new developments in technology and communications equipment have enabled TOC
networks involved in drug trafficking and other illicit activities to plan, coordinate, and perpetrate their
schemes with increased mobility and anonymity. As a result, many DTOs have developed into versatile,
loose networks that cooperate intermittently but maintain their independence. They operate worldwide and
employ sophisticated technology and financial savvy. These criminal networks bribe government officials
and take advantage of weak border security and ill-equipped law enforcement to facilitate their operations.
Along emerging trafficking routes, such as the transit route through West Africa to Europe, criminal
networks are spreading corruption and undermining fledgling democratic institutions. Due to the enormous
profits associated with drug trafficking, the illegal trade is also a way to finance other transnational criminal
and terrorist activities.

To diminish these threats, we will continue ongoing efforts to identify and disrupt the leadership,
production, intelligence gathering, transportation, and financial infrastructure of major TOC networks. By
targeting the human, technology, travel, and communications aspects of these networks, we will be able to
monitor and gather intelligence to identify the full scope of the TOC networks, their members, financial
assets, and criminal activities. We will continue ongoing efforts to enhance collaboration among domestic
law enforcement agencies and our foreign counterparts in order to strengthen our ability to coordinate
investigations and share intelligence to combat drug trafficking and TOC. Continued use of economic
sanctions under the Foreign Narcotics Kingpin Designation Act (Kingpin Act) to pursue transnational drug
organizations will enhance our ability to disrupt and dismantle TOC networks. The Kingpin Act also may be
used to prosecute persons involved in illegal activities linked to drug traffick- ing, such as arms trafficking,
bulk cash smuggling, or gang activity. Enhanced intelligence sharing and coordination among law
enforcement and intelligence agencies, the military, and our diplomatic com- munity will enable the
interagency community to develop aggressive, multi-jurisdictional approaches to dismantle TOC networks
involved in drug trafficking.

The United States will continue to aggressively target the nexus among TOC networks involved in drug
trafficking, terrorist groups, piracy on the high seas, and arms traffickers. In FY 2002, the DEA formally
established the Counter-Narco-Terrorism Operations Center (CNTOC) within SOD, which coordinates all
DEA investigations and intelligence linked to narco-terrorism and is central to U.S. efforts to disrupt these
crime-terror relationships. The United States will utilize its bilateral maritime counterdrug agree- ments and
operational procedures to facilitate cooperation in counterdrug operations. We must attack these
organizations as close to the source as we can by forward deploying our law enforcement and intelligence
assets. All-source intelligence is used by U.S. Coast Guard assets in the transit zone to extend our borders by
interdicting and apprehending traffickers.
The United States will continue its longstanding cooperation with the international community in our joint
efforts to disrupt the world drug trade through support for drug crop reduction, promotion of alternative
livelihoods, and partner nation capacity building. Our counternarcotics efforts will apply all available tools
to ensure that improvements are permanent and sustainable by international allies. These efforts will include
complementary and comprehensive assistance programs across the preven- tion, intervention, and
enforcement spectrum. By disrupting and dismantling the world’s major TOC networks involved in drug
trafficking, we will be able to reduce the availability of illicit drugs, inhibit terrorist funding, improve
national and international security, and bring TOC networks to justice.

Actions
A. Work with international partners to reduce the global supply of and demand for illegal drugs and thereby
deny funding to TOC networks.
B. Sever the links between the international illicit drug and arms trades, especially in strategic regions that
are at risk of being destabilized by these interconnected threats.
C. Sustain pressure to disrupt Consolidated Priority Organization Targets, as they often have a particu- larly
corrupting influence or provide support to terrorism.
D. Maximize use of the Kingpin Act to pursue transnational drug organizations.
E. Develop a comprehensive approach to dismantle DTOs with connections to terrorist organizations.
F. Work with international partners to shut down emerging drug transit routes and associated cor- ruption in
West Africa.
G. Coordinate with international partners to prevent synthetic drug production, trafficking, and pre- cursor
chemical diversion.

Countering Illicit Finance for Drug Traffickers & Terrorists

In February 2011, the U.S. Department of the Treasury, based upon an investigation by the DEA, announced
the identification of the Lebanese Canadian Bank (LCB) as a financial institution of primary money laun-
dering concern under Section 311 of the USA PATRIOT Act. The Department of the Treasury found there
was reason to believe LCB managers were complicit in facilitating the money-laundering activities of an
international narcotics trafficking and money laundering network controlled by Ayman Joumaa who was
designated as a drug Kingpin on January 26, 2011 pursuant to the Kingpin Act. This network moved illegal
drugs from South America to Europe and the Middle East via West Africa and laundered hundreds of mil-
lions of dollars monthly through accounts held at LCB, as well as through trade-based money laundering
involving consumer goods throughout the world, including through used car dealerships in the United States.
The U.S. Government also found reason to believe there were links between the international narcotics
trafficking and money laundering network, LCB, and the terrorist organization Hizballah.

International Drug Enforcement Conference

The annual DEA-led International Drug Enforcement Conference (IDEC), which has been held annually for
the past 28 years, is a major contributor to international cooperation and capacity building. The IDEC brings
the top drug law enforcement leaders and senior investigators from over 100 nations to a single venue where
yearly agendas are set for cooperation, intelligence sharing, and case prioritization. IDEC— the world’s
largest international drug law enforcement conference—has produced concrete results year after year.
During the conferences, DEA and partner nations jointly develop plans to build greater law enforcement and
investigatory capacity. In addition, host nation personnel and U.S. law enforcement exchange information
on priority investigatory targets.
Build International Capacity, Cooperation, and Partnerships
Sustainable progress against TOC requires both political commitment and effective law enforcement and
criminal justice capacities on a worldwide basis. TOC threatens the security and well-being of people around
the world and jeopardizes the functioning of the global economy. Not all of these threats are equally visible
to international audiences. Absent broad recognition of these shared threats, our collaboration with
international partners to confront TOC will be constrained by limited political will. The United States will
reach out directly to the international business community and the general public to convey that both nations
and individuals share a common enemy in TOC and have a common stake in addressing this threat.

For nations that have the will to fulfill their international law enforcement commitments but lack the
necessary means, the United States is committed to partnering with them to develop stronger law
enforcement and criminal justice institutions necessary for ensuring the rule of law. Over the past decade,
important gains have been made in developing criminal justice capacities in key regions of the world. The
goal of the United States is to promote the expansion of such achievements on a worldwide basis, to the
point where international law enforcement capabilities and cooperation among states are self-sustaining.
Great progress also has been made in developing a common normative framework for international
cooperation against TOC threats. The challenge for the United States and other countries over the next
decade is to bring the promise of this worldwide regime into practice. The United States will encourage
international partners to dedicate the necessary political capital and resources toward making the promise of
these commitments a reality. The United States will pursue this through both a renewed commitment to
multilateral diplomacy and by leveraging bilateral partnerships to elevate the importance of combating TOC
as a key priority of U.S. diplomacy. For example, in February 2011, the United States and the United
Kingdom established the Organized Crime Contact Group, to be chaired by the UK Home Secretary and the
Assistant to the President for Homeland Security and Counterterrorism. In addition, the United States
deploys hundreds of law enforcement attachés to its missions abroad to develop and maintain foreign
contacts essential to combating immediate threats to public safety and security. The United States will
continue to place a high priority on the provision of international technical assistance through our missions
abroad and will continue to improve the coordination of these programs.

The United States will leverage all possible areas of cooperation, including legal instruments such as the UN
Convention against Transnational Organized Crime (the Palermo Convention), the UN Convention against
the Illicit Traffic in Narcotic Drugs and Psychotropic Substances, and the protocols to which the United
States is a party, to obtain the assistance of international partners and to raise international criminal justice,
border security, and law enforcement standards and norms. The United States will strengthen its engagement
with the United Nations in this regard and leverage the growing role of regional and other multilateral
institutions that have risen in significance and influence over the past decade. Additionally, the United States
will continue to pursue cooperation with other countries and with partners such as the European Union, the
G-8, the G-20, and new inter-regional platforms across the Pacific and Atlantic in developing leading-edge
initiatives and political commitments to combat TOC.
The United States also will seek to develop informal partnerships with states that share U.S. goals to prevent
TOC networks from abusing the benefits of globalization. By promoting flexible networks of law
enforcement and diplomatic partners, the United States can leverage the expertise and infrastructure of
committed governments and respond more quickly to changing dynamics in transnational criminal threats.
The United States convened a meeting of 25 countries and jurisdictions across the Pacific in April 2009 to
consider common approaches and strengthen cooperation against transnational criminal networks that span
East Asia, the Pacific, and Latin America. The United States hosted a similar event in May 2011 with the
European Union to generate enhanced partnerships against trans-Atlantic criminal networks operating across
Latin America, West Africa, and Europe. By building cooperative platforms and networks incrementally, the
United States will generate greater collective action, joint cases, and common strategic approaches with our
international partners to combat transnational criminal threats.

Actions
A. Raise international awareness of TOC and build multilateral cooperation against it.
B. Partner with countries able to contribute key law enforcement resources, other donors, and the United
Nations to launch a new International Police Peacekeeping Operations Support Program to enhance
policing and law enforcement capacity in ungoverned spaces.
C. Leverage assets to enhance foreign capabilities, including counterterrorism capacity building, foreign law
enforcement cooperation, military cooperation, and the strengthening of justice and interior ministries.
D. Implement a public diplomacy strategy to reduce the demand for illicit goods and services that fuels TOC.
E. Implement the Central American Citizen Security Partnership to strengthen courts, civil society groups
and institutions that uphold the rule of law in the region.
F. Implement the State Department’s West Africa Citizen Security Initiative to combat transnational
criminal threats in the region.
G. Initiate new dialogue in multilateral fora to combat corruption and illicit trade, to include, as part of the
Administration’s intellectual property enforcement strategy, stemming the flow of dangerous counterfeit
products.
H. Build partnerships with other donors, private sector experts, nongovernmental organizations, civil society
groups, the media, and academia that focus on supporting political will for criminal justice reform.
I. Increase international scientific research, data collection, and analysis to assess the scope and impact of
TOC and the most effective means to combat it.
J. Institutionalize the U.S.-UK Organized Crime Contact Group to deepen bilateral cooperation and
galvanize multilateral collaboration against TOC.
K. Finalize the U.S.-Mexico 21st Century Border Action Plan agreements on law enforcement cooperation.
L. Expand cooperation with the United Nations to promote implementation of the United Nations
Convention against Transnational Organized Crime, including through the development of an appropriate
review mechanism.

Protect the Financial System and Strategic Markets Against

Transnational Organized Crime
However, some TOC activity is inherently harder to detect and deter. The United States will place special
emphasis on IPR violations and cybercrimes due to their particular impact on the economy and consumer
health and safety. The United States remains intent on improving the transparency of the international
financial system, including an effort to expose vulnerabilities that could be exploited by terrorist and other
illicit financial networks. At the same time, the United States will enhance and apply our financial tools and
sanctions more effectively to close those vulnerabilities, disrupt and dismantle illicit financial networks, and
apply pressure on the state entities that directly or indirectly support TOC. We will continue to monitor TOC
infiltration of the global economy to better protect the financial system and freeze the assets of criminal
networks under expanded Presidential sanctions authorities and/or seize them under existing forfeiture laws.

Actions
A. Implement a new Executive Order to prohibit the transactions and block the assets under U.S. jurisdiction
of TOC networks and their associates that threaten critical U.S. interests.
B. Prevent or disrupt criminal involvement in emerging and strategic markets.
C. Increase awareness and provide incentives and alternatives for the private sector to reduce facilita- tion of
TOC.
D. Develop a mechanism that would make unclassified data on TOC available to private sector partners.
E. Implement the Administration’s joint strategic plan on intellectual property enforcement to target,
investigate, and prosecute intellectual property crimes committed by TOC.
F. Enhance domestic and foreign capabilities to combat the increasing involvement of TOC networks in
cybercrime and build international capacity to forensically exploit and judicially process digital evidence.
G. Use authorities under the USA PATRIOT Act to designate foreign jurisdictions, institutions, or classes of
transactions as ‘‘primary money-laundering concerns,” allowing for the introduction of various restrictive
measures on financial dealings by U.S. persons with those entities.
H. Identify foreign kleptocrats who have corrupt relationships with TOC networks and target their assets for
freezing, forfeiture, and repatriation to victimized governments.
I. Work with Congress to enact legislation to require disclosure of beneficial ownership information of legal
entities at the time of company formation in order to enhance transparency for law enforce- ment and
other purposes.
Support the work of the Financial Action Task Force, which sets and enforces global standards to combat
both money laundering and the financing of terrorism

Conclusion and Recommendations

Organized crime, armed conflict and violent extremism are all becoming increasingly intertwined. Fragility,
weak institutions and conflicts provide an attractive environment and breeding ground for illicit networks
and extremist organizations and these connected groups can seriously impede peace-building efforts and
threaten human security.
 Organized crime, conflict, and violent extremism all thrive when any state is weak or its structure is
absent. Where there is a lack of security, a want of access to justice, and poor service provision, then
organized crime often fills the void by taking over certain functions of the state.
 Traditionally, crime and violent extremism have not formed a part of the peace-building agenda but
instead have been treated as separate matters for law enforcement strategies.
 Dealing with organized crime and violent extremism in countries and societies emerging from
conflict requires a multidimensional peace-building approach that includes the perpetrators of
organized crime and those involved in armed conflict and violent extremism. UN Security Council
mandates for peacekeeping operations must be so arranged that they include the fght against
organized crime.
 Strengthening social cohesion and inclusiveness, trust and legitimacy of the government concerned
and its institutions must be at the centre of peace-building strategies, together with realizable peace
dividends.
 The UN, the EU and other actors must meet such challenges with comprehensive policies and
approaches because military, diplomatic or police methods alone will not suffice.

The coming decade and the present one will be a period of great transition for the many players involved in
this discussion, including organized crime and terror groups; U.S. intelligence, special forces, and law
enforcement; and the political state-to-state relationships related to the global war on terrorism and crime.
Terrorist groups are not only reeling from a loss of state sponsorship, but are being drained of funds through
constant U.S. pressure on charities, electronic banking, and other worldwide efforts to end terror financing.
Whether the future will lead to a convergence of organized crime and terrorism, partnership or
transformation, a potent threat is gathering and altering its form by the day. This lethal cocktail, consisting
of one part criminal, one part terrorist and one part weak or corrupt state, poses a formidable and
increasingly powerful challenge to U.S. and global interests. Law enforcement and intelligence officials will
have to be more agile and adaptable in responding the amorphous tactics adopted by terrorist groups.
Many people previously believed that a nation could only be seriously threatened by another sovereign state.
What occurred and continues to exist in Afghanistan under the combination of the Taliban, al Qaeda,
regional warlords and criminal syndicates is frightening yet instructive: when these forces come together in
a weak or failed state, the consequences for the wider world can and will be devastating.

In recent years threats to peace, security, and stability posed by transnational organized crime and violent
extremism have attracted increased attention. Research and experience from the field show that the nexus
between organized crime and conflict constitutes a major test for twenty-first century peace-building. In
latter years the United Nations Security Council has repeatedly emphasized the threats posed by organized
crime and violent extremism - stating, for instance: "“terrorist groups benefiting from transnational
organized crime may contribute to undermining affected States, specifically their security, stability,
governance, social and economic development.” Conflict is fuelling crime and its organization undermining
post-conflict peace-building, stability, and human security by altering the dynamics of conflict and
exploiting weak or fragile state structures. Armed groups that adopt is criminal agendas and form illicit
networks may also reach out for political power in order to maintain control, thus posing a serious long-term
threat to stabilization efforts. While these challenges are not new, focusing on the convergence of armed
conflict, violent extremism, and organized crime helps us both to understand and better identify how current
peace building strategies can be adapted to increase the positive impact of peace-building interventions on
long-term peace and stability. Crime, extremism and armed conflict are all part of the same story and it is
necessary to properly understand both the nature of these links and their effect on conflict dynamics. The
UN, the EU and others need to address such taxing demands with comprehensive policies and approaches
because they are beyond the means alone of diplomacy, the military, or the police.

Given the technical nature of interpretation and understanding of the OC-terrorism nexus thus far,
programmatic responses have thus largely focused on addressing issues related to the financing of terrorism,
strengthening the protocols through which illicit money can be earned, transferred and procured. Many of
the challenges that confront peace-building in the 21st century have their origins in the major geopolitical
changes that have occurred since 1989. Despite many positive developments, such as the decline in armed
conflicts and battle-related deaths since the early 1990s, the international community still faces a number of
recurring and seemingly intractable conflicts, as well as having to deal with fragile states. A diverse range of
conflict drivers can explain such multidimensional and amorphous conflicts. These include, for example,
political, economic, social, and environmental difficulties or contentious issues related to resource
distribution, jobs, injustice, and human rights abuse. The nexus between organized crime, conflict and
violent extremism, with blurred boundaries between rebels, gangs, and politicians, all form part of the
picture.

There is a need for a better understanding of how conflict, crime and violent extremism interact. One
example is that of criminal organizations taking advantage of former combatants as a potential pool of
trained recruits for criminal activities, and vice versa. Other examples are those of low cost corruption in
order to gain impudence over politicians and weak authorities, or a political discourse of grievances against
government. The latter example can be employed specifically to create political legitimacy and to disguise
criminal activity. In fragile situations marked by insecurity and an absence of the rule of law, combined with
little or no access to public services, organized crime can fll the void by taking over certain tasks of the state
– for instance, by providing health care services. Similarly, conflict hotspots and violent extremism often
converge geographically, with violent extremism being a driver of conflict just as much as being a product
of the latter. Syria is a case in point, where many of the foreign fighters who have joined extremist groups
fighting in the struggle stem from countries with a track-record of conflict and fragility. With the influx of
violent extremism the ability to draw a distinct line between conflict and terrorism becomes difficult .
However, the attraction of violent extremism does not necessarily require radicalization. It is often related to
social pressure, identity, and prestige.

The desire to have a theoretically concise and digestible framework for the OC-terrorism nexus has obscured
the very important local differences between each context. Often these groups are highly localised,
parochially-inclined and embedded in their domestic, or even sub-national political economy, without an
international agenda or strategic linkages. Moreover, the motives of individuals joining the ranks of terrorist
organizations and/or engaging in criminal conduct may vary on a number of levels. Thus, while they are
important for development actors concerned with promoting good governance, sustainable development and
human security, they are arguably not an international security priority.

The interests of illicit networks are transnational and form part of globalized market structures of demand
and supply – for example, in narcotics and human trafficking. But it is also important to recognize that the
nature of crime often remains local. In weak and vulnerable states local authorities inevitably find
themselves in a downward spiral where their frail institutions become easy pickings for illicit networks and
war participants aiming to extend their influence on politics. Incentives for individuals to join criminal gangs
and networks in fragile contexts can be strong if they are promised access to power and money. According
to UNODC estimates profits generated by illicit networks amount to 1.5 per cent of the global economy.
When one considers the difficulties of obtaining accurate figures the true profits might be even higher.
Furthermore, the co-penetration of politics, business and organized crime erodes the already weak state. The
people’s trust in the state diminishes as illicit financial flows drain it of the resources required to build
resilient institutions and provide essential services. In weak states and in precarious circumstances local
authorities lack the means to deal with the negative consequences of organized crime, such as high homicide
rates, widespread insecurity, violence and corruption.

As an established practice crime has not formed part of the peace-building agenda. Instead it has been
treated as a separate matter of law enforcement strategy. This division is based on the misconception of
organized crime not being about political power. However, we now know that an important feature of
organized crime is its intimate relationship with complicit political actors. Criminal organizations pursue
political strategies to gain control and power. The difference between political and criminal protagonists
might in some cases lay in their strategies rather than in their objectives. It is a part of the strategic logic of
illicit networks to gain influence over government resources and branches in covert ways rather than in
competing for political power publicly. In the long term such veiled influences and methods of wielding
power have damaging consequences for the institutional quality of democratic governance and the
legitimacy of authorities, as well as in states or regions not directly affected by armed conflict.

In conflict or post-conflict situations these effects can be even more detrimental because organized crime
impedes peace-building and lowers incentives for peace. There is an interest in perpetuating armed conflict,
fragility, and weak institutions that serve as a cover and provide breeding grounds and an environment
where illicit activities thrive. Colombia is a case in point, where the agendas of illicit networks and their
leverage on politics and government, as well as rebel groups, have distorted peace processes and
complicated mediation efforts. Africa’s Great Lakes region represents an example of how transnational
activities of illicit networks can incentivize international interventions to fight transnational organized crime,
thus further contributing to the internationalization of armed conflict. Given the intimate relationship
between organized crime and politics, the political legitimacy of such networks must be acknowledged.
Thus to deal successfully with organized crime and violent extremism in the long term demands a political
strategy.

In light of the far-reaching implications that the nexus between organized crime, conflict, and violent
extremism has for peace-building, it becomes clear that technical approaches based on law enforcement
alone are not enough. On the contrary, research and experience illustrate that a multidimensional peace-
building method is necessary that encompasses the whole of government and does not treat organized crime
and violent extremism as separate matters. A peace-building approach that confronts organized crime,
conflict, and violent extremism is required with the clear objective of preventing violence. The approach
should focus on the intended outcomes of peace-building: this is discernible change, social cohesion, trust
and the legitimacy of government and its institutions. In order to strengthen a consistent social order and
deal with marginalization (as one potential cause of extremism) peace-building should include the people by
talking to them and getting involved in their communities. Institution-building is another essential
component.

Even where there is recognition of the need for a revised peace-building approach to organized crime and
violent extremism, such interventions are often insufficiently prepared to meet the demands involved. They
also face considerable obstacles relating to the design of mandates and missions. Several of the challenges
listed below are not specifically or solely related to organized crime and violent extremism. However, they
gain even more in importance when considering the specific context at hand.

As such, in the development of adequate responses to be effective within a particular context, practitioners
and policy makers should consider and assess an OC-terrorism threat from the macro, meso and micro levels,
in order to determine both the best suited responders (for example, from the intelligence, law enforcement
communities, or both), and targeted interventions. The table below aims to provide a basic example of issues
that may be identified as contributors at various levels to the OC-terrorism nexus, and offers a general
framework of responses that remains malleable enough to be adapted to various contexts.

This dissertation attempted to challenge the current convictions in the analysis of the crime-terror nexus and
to conclude furthermore that the crime-terror nexus phenomenon extends to the motivations of these groups.
The profit-versus-ideology dichotomy has mislead scholars and the policymaking community to artificially
distinguish between criminal and terrorist groups. This especially has been the case for the analysis of the
motivations of today’s most prominent Islamist terrorist organisations.

The role of the Salafist-Jihadist ideology is to disguise the true criminal motivations of power, money, and
status, and furthermore to leverage powerful religious institutions. It is a credible and stable façade that
legitimises the massive campaigns of violence and enslavement, territorial grabbing, expansive extortion
rackets, and unrelenting dominance over licit and illicit markets. Ideology justifies crime, but not for the
objective of achieving religio-political ends as defined by Islamist philosophy. Instead, it is a lifestyle
exhibiting “criminal piety”.

Understanding the true motivations of extremist groups is essential to counter-terrorism strategy.

Undoubtedly governments have reoriented counter-terrorism strategies to better suit the current global
jihadist threat environment. These programmes focus on the operational facets of terrorism such as illicit
financing and the smuggling of operatives and weapons. After having concluded that the crime-terror nexus
includes the shifting motivations of Islamist terrorist groups, the counter-terrorism community needs again
to readapt to this reality. In a strategy policy analysis, Fromsom and Simon state, “ISIS’s four principal
manifestations – as a guerrilla army, Sunni revanchist political movement, millenarian Islamist cult and
ruthless administrator of territory – do suggest a strategy against it: containment.” Though ISIS undoubtedly
is all of those things, they are first and foremost a criminal organisation. The effective dissemination of this
fact can contribute to the disruption of current terrorist operations and the prevention of radicalisation.
Frustrating the purist image that ISIS and similar extremist organisations seek to promote should be a main
crux to counter-terrorism strategy. The concluding implication of this dissertation, however, is that the
future of Islamist terrorism, perhaps terrorism altogether, will find truly ideologically-motivated, altruistic
terrorist groups to be rare.

A narrow analytic focus on ideology’s role in Islamist terrorist groups has fomented inaccurate conclusions
that there are only “possible links” between criminals and Islamist terrorist groups, and that their interactions
are limited to short-term, tactical, and opportunistic relationships. In reality, long-term strategic relationships
with criminal organisations and the establishment of in-house criminal enterprises shows the rather
aggressive entrepreneurial pursuits of Islamist terrorist groups. The current assumptions are long outdated.
The criminal records of al Qaeda, al-Shabaab, Hezbollah, the Taliban, and the Islamic State are expansive.
These groups exercise a range of working relationships with transnational criminal organisations and drug
trafficking organisations including Mara Salvatrucha, Albanian and Italian Mafiosi, and Northern and
Western African gangs. In addition to collaboration, Islamist terrorist organisations have fully adapted
criminal modus operandi into their jihadist doctrines. The motivations of jihadist organisations are not
ideological, but rather criminal. Social group dynamics and application of gang theory illustrate these
extremist organisations as sub-cultural groups that provide members with needs. Ideology is not the “glue”
that unites members together under an Islamist banner. Instead the adhesive lies in a matrix of internal and
external influencing factors that are reinforced by group behavioural norms and sub-cultural value systems.
Therefore, Islamist terrorist groups are gangs, albeit highly sophisticated ones.

The value of the Instrument contributing to Stability and peace (IcSP) as an instrument with greater financial
versatility, that targets pilot and cross-sectoral programmes that bridge the gap between security and
development are particularly well suited to activities of this kind.
Several priority areas were identified in the course of the discussion where responses would need
to be strengthened to address the organised crime and terrorism nexus. These can be loosely
divided into three areas: (i) building the evidence basis; (ii) promoting local engagement; and (iii)
building capacity of state and non-state actors. By looking at the OC-terrorism nexus through three lenses,
effective responses may be tailored to address threats in specific contexts. In this regard, it is suggested that
EU programming would be well directed at considering the following:

a) Building the evidence base.

All levels: In developing responses to terrorism and organised crime, whether at the local, national, regional
or international level, it is essential to assess local conditions in order to produce effective tailor-made
strategies that are research and evidence-based. Relevant EU entities must strengthen their research and
analytical work on the nexus between organised crime and terrorism in both specific EU member states as
well as peripheral regions in which the EU may be directly or indirectly affected by (including the MENA,
Africa and Central Asia regions).

The duty to build an evidence base for the development of responses does not fall squarely on the shoulders
of the EU, but on local stakeholders as well. Indeed, local actors, by way of their proximity, are often in a
more suitable position to carry out research of local conditions, and thus it is important that relevant EU
entities provide capacity building initiatives for local actors to undertake research relating to terrorism and
organised crime in their respective communities. Beyond focusing on the financing of terrorism, research
undertaken should consider placing attention on specific areas such as the roles of women and youth as both
proponents and victims of terrorism and OC, as well as the operation of illicit economies and local
businesses.

Areas highlighted for particularly for policy-orientated research would be:

 The role of non-traditional and informal financial systems

 Reducing the vulnerability of local communities and businesses to extortion.
 Strategic use of violence by organised crime and terrorist groups
 Enhancing understanding of the meso factors and trends that apply to both organised crime and terror.
 Engaging with and role of the diaspora as a communication channel, financier, source of
resilience.
To achieve a more systematic, comprehensive and multidimensional response, a stronger evidence basis is
needed not only to understand the nexus between organized crime and terrorism, but also how it is enabled.
Research priorities identified during the meeting include:

1) Understanding and addressing the enabling environment for the OC-CT Nexus.
a) What are the facilitating factors?
b) How do conflict and insecurity open opportunities for crime and terror groups to strengthen their
influence?
c) Negotiating strategies with criminals and terrorist groups in a transition.
2) Identifying, documenting and disseminating best practices and lessons learned in the following areas:
a) Sources of community resilience;
b) Building legitimacy of state institutions for local service delivery.
3) Community perception surveys to identify sources of local legitimacy and possible change agents.

b) Local engagement
The empowerment of local communities to build social resilience to terrorism and crime entails an all-of-
society approach with relevant actors at all levels involved in identifying responses and solutions. All
relevant actors, including women and young people, community organizations, religious and other civic
leaders, financial institutions, the private sector and educators at all levels, need to be involved in designing
comprehensive solutions to build the State’s capabilities and enhance its legitimacy in the eyes of local
communities. Innovation and experimentation is needed in the following areas:

 Building linkages between community and the state in areas vulnerable to crime and terror.
 Mobilising alternative livelihoods for those engaged in illicit trafficking and terrorism.
 Demobilisation strategies for those involved in trafficking and terrorist groups.
 Strategic communications initiatives that focus on raising awareness on the negative impact of local
terrorist and criminal activities.
 Community-led service delivery initiatives.
 Strategies for community engagement and communication through social media.

Meso level: While much attention has been placed on the link between terrorism and organised crime
through a financial lens, it is important to consider other areas in which these two phenomena converge. The
goal of interventions in this area should be to reduce the pool of people who fall in the category of being
vulnerable to criminal or terrorist recruitment. Marginalised, persecuted or vulnerable groups, may find
joining terrorist or OC groups an attractive option where they see insufficient return from the legitimate
economy, or where feelings of isolation or lack of potential for social advancement are an issue. Perceived
corruption, impunity or political, social and economic inequality further exacerbate these tendencies.
Moreover, communities in which terrorist and OC organisations seek legitimacy by creating social services
and programs, may be more sympathetic to such groups and provide a potential recruitment pool. Strategies
(at both the EU and national levels) should focus on local engagement in order to build social resilience
through a multi-sectoral approach, with actors from all areas of society (including law enforcement, private
sector, religious institutions, education, civil society, etc.), in order to dispel any narratives that attempt to
make terrorism and organised crime a viable option. Such actors are often closest to vulnerable communities
and therefore may be in the best position to serve as credible voices of resilience.

Micro level: While each individual’s narrative is uniquely personal, nonetheless, understanding that certain
acts serve as triggers the goal of interventions here would be to reduce the likelihood that people turn to
crime or are vulnerable to radicalisation. Increasing safety nets, building resilience, providing enhanced
levels of psycho-social support to people following catalytic events (deaths, income shocks, violent events)
may prove beneficial.

c) Good governance.
Macro level: Principles of good governance, anti-corruption, countering impunity and social
marginalisation and exclusion seem critical to breaking down the strategic objectives and capacities for
leverage of both criminal and terrorist groups, regardless of their manifestation. EU programmes in this
domain would benefit from a greater awareness and tailored programming to addressing reliance on illicit
flows, advocating for inclusive governance, and opening space for peaceful protest and citizen activism.
Addressing impunity (or the perception thereof) in government and state institutions are critical to creating
a culture in which lawfulness and respect for the social compact are enhanced.

Meso level: It was identified that periods of political instability, including unconstitutional changes in
government, controversial electoral processes, are times in which the risk of violent (possibly
insurgent/terrorist) protest can scale up, and where both political parties and violent opposition groups are
looking for financial resources and political capital, and thus the nexus risk is high. Recognising these
periods of vulnerability and identifying responses that would protect political integrity and the transition
period would be key to prevent governance gains being distorted. Efforts to create ‘free and fair’ elections
now need to also go beyond just violence, but also gain cognisance of the risks of illicit finance which
increase the nexus between political and criminal endeavours.

Micro level: Focusing on the service and client orientation of the front-facing branches of the state is critical
to preventing the catalytic trigger events, particularly in those institutions of security and justice.

d) Enhancing service delivery.

Macro level: As mentioned, a number criminal and terrorist groups (such as Al-Shabaab), may serve as
alternative governance structures and deliver services to communities where states are absent or unwilling.
This has built their legitimacy with local populations, making it harder for policy makers and practitioners to
address and control. Just as important as building the capacities of local communities to resist the lure of
terrorism and organised crime, it is essential to also enhance state capacities to deliver services to
marginalised and vulnerable communities over the long term. Studies have shown that sustained efforts are
pivotal, as short-term ‘quick-win’ development gains do not develop sustainable credibility and legitimacy.
Furthermore, it has been suggested that to counter the allure of criminal or terrorist groups, development
strategies need to be tailored less to absolute increases in services, but more to the provision of opportunities
for economic and social advancement.

e) Capacity building.
New approaches require the development of tools and building capacity to address priority challenges. The
expert participants identified the following themes where capacity building was a priority:

1) Strengthening the capacity of state institutions to engage with local communities in a way that is
consistent with international human rights norms and the rule of law, and which reinforces state
legitimacy in the eyes of the populations.
2) Building capacity of independent media, civil society and other non-state actors to counter crime and
terrorism and promote alternative narratives.
3) Strengthening capacity to protect advocates and promote peaceful protest and citizen engagement.
4) Strategies to shift informal activities into the formal sector, to promote social protection of those
involved and regulate crime controlled enterprises.

In addition, the discussions worked towards the completion of a matrix that identified priority
areas for concern and possible programmatic responses that could be used to address them.
While not all issues were covered in full, the resultant discussion and conclusions serve as a useful
guide to future programming

Meso level: Currently the focus of nexus programming is exclusively placed on capacity building of
security sector institutions, carrying the underlying assumptions that technical capacity in law enforcement,
border control and in the justice system will equally well serve to counter both criminal and terrorist groups.
There is little cooperation between counterpart agencies in addressing a more multi-faceted understanding of
the OC-terrorism phenomenon. As such, the EU could lead capacity building activities for both state and
non-state actors in order to garner trust, enhance cooperation, and improve information sharing and the
exchange of best practices.
For state actors, the issue of when to share information for law enforcement purposes between intelligence
agencies and police is particularly key. In addition, agencies with aims to improve border control (such as
FRONTEX and national agencies), should be trained to coordinate between EU member states and their
anti-crime and anti-terrorism agencies for their investigative and analytic capabilities, but also with
development actors for engagement with livelihood alternatives and programming around identity and
inclusiveness. In addition, with regards to the influx of migrants into Europe from peripheral regions, EU
funded initiatives externally could be directed towards coordinating with DG Home on communication and
integration strategies with diaspora groups.

f) Normative frameworks.
Macro level: The EU should lead Member States in establishing a unified approach towards external states
regarding the OC-terrorism nexus. The European Council and Commission may implement necessary
strategies to reinforce the legitimacy and effectiveness of the EU in dealing with the OC-terrorism nexus.
Additionally, it is imperative that EU member states incorporate related international instruments into
national legislation, while taking into consideration that such laws may be limited in that they fail to address
and/or focus on informal economic activity.

g) Monitoring Push/Pull Factors and the “balloon effect”.

Meso level: Having understood that illicit flows and criminal and terrorist ideologies and ‘brands’ are
transnational threats which displace, interact, merge and fragment, the capacity to monitor and understand
the movement of these flows is critical. However, to further recognise that global flows of goods and
ideologies engage with local control groups, which requires acute political economies to be a continual
feature of response work. Social networks have facilitated the connection of groups and ideologies, both in
the criminal world and in global terrorist movements. Society, identity, and connectivity are increasingly
being defined in the social media space, rather than the physical borders of geographic states. This has
created an open forum for the connection of individuals and exchange of ideas, goods and services through
which criminal organisation can ideologically thrive. It has become one of the primary means by which
groups identify the like-minded, engage with them and garner their support. The potency of social
media comes in its unique ability to broadcast en masse, whilst at the same time delivering messages that
seem intimate, to which an individual can respond. A myriad of deviant groups are using social media to
shape opinion and elicit respect, fear, and terror. They are exploiting the functionalities of social media
along all parts of their enterprise chain, from identification of allies and victims, to executing operational
capacities such as logistics and fundraising. In doing so, social media is blurring definitional categorisation
between criminal groups, terrorists, political activists, and insurgents; perhaps more importantly, it is
increasingly conferring legitimacy on their acts by drawing average citizens into this spectrum. This is a
critical vector which has to be better understood, and which multi-lateral actors, individual states and the
private sector will have to collaborate to counter-act.
It is essential to recognize the fact that to date (despite the attention of the UN Security Council) only a few
mandates include the fight against organized crime as a mission priority. Failure to include organized crime
in mandates results in missions being prevented from taking action to stop it when the security forces of the
host government are unwilling or unable to do so. Peacekeeping missions are also generally country–based
and lack the necessary mandate to work across borders with regional strategies. When one considers the
transnational dimension of organized crime this represents a fundamental obstruction to eliminating criminal
networks. There are a few notable exceptions that indicate that different approaches are possible. For
instance, the UN’s West Africa Coast Initiative (WACI) in its targeting drug trafficking in Guinea-Bissau,
Liberia, Sierra-Leone and Côte d’Ivoire. But there is still a long way to go.
Even where a mandate allows a mission to engage with criminal organizations, allocating resources and
recruiting staff with the expertise and knowledge for dealing with them is often difficult. Despite the
frequently recognized need for a comprehensive peace-building approach, missions often lack the technical
capabilities to respond effectively to organized crime and the demands of law enforcement. In contexts
where criminal organizations replace the state by providing certain services, the unintended and potentially
harmful consequences of taking action against them must be taken into account. As with the case of the UN
and the EU missions in Kosovo, the nexus described above and the scale and impact of organized crime on
conflict dynamics are often underestimated from the beginning. Missions lack not only the analytical
capabilities for investigations but the operational means to mount covert operations. Improving coordination
and cooperation between different international actors and UN agencies and UN country teams is therefore
indispensable. The ongoing review of the UN’s peace-building architecture and the High-Level Panel on
Peacekeeping Operations, as well as fairly new tools such as the UN’s Global Focal Point for Police, Justice,
and Corrections, all provide opportunities for improvement.

Another testing ground is that missions are poorly prepared for the required long-term commitment to build
capacities and relationships of trust with local actors, especially where criminal networks have become
‘partners in crime’ with public and the private sectors. Contributing factors to this challenge are in many
cases security conditions that prevent mission staff from leaving their compound, thus making it difficult to
talk to local representatives and the people. Even without a mandate enabling action against illicit networks,
missions need analytical capabilities in order to identify trustworthy partners. Institution-building will not
succeed when such networks infiltrate and undermine government institutions Failure to establish trusted
relationships might easily result in support for those engaged in organized crime with no interest in peace-
building or any form of legitimate government. This will ultimately undermine peace-building efforts and
the legitimacy of the state, as well as that of the international mission.

Last but not least, interacting with non-state actors is also a question of definition and legality. How
international actors can engage non-state actors largely depends on such definition. Categorizing groups as
rebels, terrorists, or criminals has far-reaching consequences that go well beyond semantics. Interaction with
(former) rebel groups that are part of a formal peace process and negotiations is accepted, even though the
same group might also be involved in drug-trafficking to fund its political struggle. At the same time, there
is little support for offering talks to actors regarded as being part of illicit networks or violent extremist
groups - let alone terrorists. The labelling of non-state actors has immediate consequences on the ways that
international actors can approach such groups and represents a considerable obstacle to the constructive
engagement required for a comprehensive peace-building approach.

Despite the importance of rebuilding a state and its institutions, the focus of the UN on the state and its
affairs at country level gets in the way of efforts to deal with the dynamics that relate to organized crime and
violent extremism, which play out at either sub national or transnational levels. Community-based
approaches with a focus on civil society organizations are often difficult to implement because of the strong
emphasis on rebuilding the state concerned. Moreover, enhancing community peace-building is also
becoming more difficult because UN missions are targeted in conflict areas. Nonetheless, procedures that
strengthen social cohesion that are inclusive and pay attention to the particular needs of women and youths
are unlikely to succeed if they do not begin at community level, where many extremist groups and illicit
networks have their bases. This includes the creation of proper opportunities for education and employment
that reduce incentives to join criminal organizations.

Furthermore, issues of inequality and marginalization between groups in society must be addressed, since
horizontal inequality is often linked to extremism. Again, the provision of social services through the state
and its institutions is a crucial element in building confidence. The more a state is in a position to dispense
good social services to all its citizens, the less room there is for extremists and illicit networks to step in and
replace the functions of the state.

A Research Agenda

The evidence presented in this Topic Guide shows

 (1) that organised crime is a highly complex and dynamic economic, political and social
phenomenon that comes in many different guises and is spreading across the globe; and
(2) that organised crime affects a number of both low- and middle-income countries and fragile
states in particularly serious ways.
Public awareness of the challenges and threats posed by organised crime for the security of citizens and
states and inclusive and sustainable development is growing, including among the international development
community. This is reflected in the inclusion of organised crime on the SDG agenda and the work conducted
by new global expert and practitioner networks, such as the Global Initiative against Transnational
Organized Crime. Our knowledge about organised crime, including in low- and middle-income countries, is
today quite advanced, and the body of research on different aspects of organised crime is growing. Further,
the networking capacity in the organised crime research community across the globe has increased in recent
years.

However, a number of areas need more research attention to strengthen our capacity to reduce the negative
impacts of organised crime on development. Here, it is important to reiterate the point made earlier that
research on organised crime is inherently challenging. Access to reliable data is limited and we lack robust
evaluations of the impact of counter-crime programmes. This is the case for conventional law enforcement
action and for crime-sensitive interventions by development actors in the fields of strengthening governance,
the rule of law and human rights in crime-permeated settings and fragile states.

In this article we repeatedly referred to the need for empirical research into possible links between terrorists
and criminals. As G. Andreopoulos (1991: 226) noted, “individual cases rather than a series of abstract
assumptions can credibly constitute the building blocks of theory formation”. In our view, in all the cases
where there is a known or plausible collaboration between terrorists and organized crime, the following ten
questions, based on the preliminary analysis offered here, might be helpful as guidelines.

1. Under what political constellations do these forms of collaboration emerge?

2. Which types of organized crime can easily go together with which variants of terrorism? And
which types are less compatible?
3. Is there evidence of intervention by national or foreign authorities regarding the promotion of
a collaboration process?
4. Which structural features possessed by such organizations point towards convergence?
5. Which types of alliance and convergence occur most frequently?
6. What exactly is their collaboration based on? What do the two organizations exploit in each
other?
7. How are differences in value orientations and class backgrounds of conventional criminals
and terrorists resolved?
8. Is there indeed evidence of a clear resemblance in how they strive for power?
9. Is all organized crime strictly cantered around profit making or are there exceptions where
certain activities serve to acquire political spoils or gains?
10. Which element is dominant in the long run, the political ideological motivation or the
criminal material one?

The following list of questions for consideration in future research is therefore not exhaustive. It focuses on
issues crucial for the design and implementation of integrated approaches to countering and mitigating the
impact of organised crime on development processes.

1. How can we evaluate the impact of conventional, law enforcement-focused counter crime
interventions in low- and middle-income countries and in fragile states?
2. How can we measure organised crime’s multiple impacts on development in both low and middle-
income countries?
3. When integrated development interventions aim to reduce the harm caused by organised crime, and
to tackle the problem’s transnational and international dimensions, what should they prioritise? How
can such interventions be linked to other, more conventional, governance, rule of law and
development programmes? How can trade-offs between law enforcement/security imperatives and
human development goals be minimised?
4. How can we strengthen attention to gender issues in the analysis of organised crime and in the design
of programmes to reduce its negative effects on development?
5. What issues should be prioritised to strengthen the knowledge base on the relationship between
organised crime and state fragility?
6. How can we systematically link the emerging research agenda on political settlements and
development with that of protection economies and the wider political economy of organised crime?