UN report: Billions of dollars in drug money laundered in North America in 2009
UNITED NATIONS, NEW YORK – Criminals may have laundered around $1.6 trillion in 2009, one fifth of that coming from the illicit drug trade, according to a new report by the United Nations Office on Drugs and Crime (UNODC).
The findings suggest that most cocaine-related profits are laundered in North America and in Europe. The main destination for processing cocaine money from other subregions is probably the Caribbean.
Andean coca farmers earned about $1 billion, though the bulk of the income generated was in North America ($35 billion) and in West and Central Europe ($26 billion). Close to two thirds of that total may have been laundered in 2009.
The $1.6 trillion represents 2.7 per cent of global gross domestic product (GDP) in 2009, says the agency. This figure corresponds with the range of two to five per cent of global GDP previously established by the International Monetary Fund (IMF) to estimate the scale of money-laundering.
The report, entitled Estimating illicit financial flows resulting from drug trafficking and other transnational organized crime, also says that globally the “interception rate” for anti-money-laundering efforts remains low. Less than one per cent of illicit financial flows are currently being seized and frozen.
“Tracking the flows of illicit funds generated by drug trafficking and organized crime and analysing how they are laundered through the world’s financial systems remain daunting tasks,” said UNODC Executive Director Yury Fedotov, at the report’s launch Tuesday in Marrakech, Morocco, during the week-long meeting of the Conference of the Parties to the UN Convention on Corruption.
“Dirty money” promotes bribery and corruption, finances insurgency and, in some cases, terrorist activities, the report pointed out. It also destabilises and deters legitimate enterprise, foreign investment and development.
Criminal proceeds, excluding tax evasion, amounts to some $2.1 trillion or 3.6 per cent of GDP in 2009, according to the report. Of this total, the proceeds of transnational organized crime (drug trafficking, counterfeiting, human trafficking and small arms smuggling) amounts to 1.5 per cent of global GDP. About 70 per cent of this sum would likely have been laundered through the financial system.
The illicit drugs trade is the most profitable sector and accounts for half of all transnational organized crime proceeds and one fifth of all crime proceeds, UNODC notes.
The cocaine market is probably the most lucrative illicit drug for transnational criminal groups. Gross profits for traffickers in 2009 peaked at some $84 billion.
The report says that in drug-related crime, tends to significantly “re-invest” illicit funds into drug trafficking operations which have major negative implications for society as a whole.
Once illegal money has entered the global and financial markets, notes UNODC, it becomes much harder to trace its origins, and the laundering of ill-gotten gains may perpetuate a cycle of crime and drug trafficking.