AN ASSESSMENT OF ILLICIT TRADES 1
An assessment of Illicit Drug Use, Prostitution, And Money Laundering
Illicit drug use andprostitution, as well as organized crime especially money laundering,have internationalized, and their configurations flattened. Theconventional structure of these crimes has changed and in it, a newmodel encompassing loosely structured groups with global reach hassufficed. Dealers in these illicit trades have utilized thetechnological advancements across the world to hide their illegalbusiness. As such, governments have tried in vain and in some casessucceeded in responding to the challenges posed by global criminalorganizations. Against this backdrop, the paper focuses on structuresof illegal prostitution, drug use, and money laundering as well asdefines the structures within which the trades operate. Moreover, thepaper elucidates the nature of these illicit trades, identifies someof the responses that have worked to hinder the trade, illustratesthe implications of the money generated in the trades in legalbusinesses, and shows the inadequacy of governance in the area ofthese trades.
An assessment of illicit drug use, prostitution, and money laundering
Illegaldrug use denotes the abuse of prescription drugs and use of illicitor prohibited drugs such as cocaine, heroin, marijuana, andmethamphetamine, among other prohibited drugs under federal laws.Illegal prostitution is the illegal commission by an individual ofany peculiar or natural sexual action for monetary consideration orany other valuable consideration. Illegal prostitution hascontributed to human trafficking especially when it involves childprostitutes. These children are usually trafficked from developingcountries and sold for prostitution purposes. Money laundering, onthe other hand, is the practice or process of assimilating theincomes of crime into the recognized mainstream of the financialsystem by concealing the origin of the proceeds. Most of theseproceeds come from the illegal drug trade, prostitution, and humantrafficking. Jenner (2011) postulates that illicit drugs, estimatedat more than $500 billion annually account for the largest source ofmoney laundering globally. Drug harms millions of people worldwide,which increases the health and economic burden of most countries.Moreover, illicit drug use has escalated drug trafficking,prostitution, and money laundering (Campana, 2016). As such, theanalysis focuses on the structures, nature, and effects of drugabuse, prostitution, and money laundering as well as the success ofcountries in combating the vices.
How the illicit tradeshave utilized structures and technology
Today, illegal prostitution,money laundering and illicit drug use have witnessedinternationalization and transformation because of globalization andtechnological advancements. Technological advancements have helped towiden transportation infrastructures and supply processes, reducetrade barriers, and augment volumes of international business, whichhave helped criminals to hide their illegal trades. Reduced tradebarriers have allowed organized criminals to integrate their criminalproceeds to legal businesses, as they usually and easily assimilatethe proceeds in hospitality businesses. On the other hand, widenedtransportation infrastructures have allowed the criminals to trafficdrugs and people easily for illegal use. Ferragut (2012) and Levi(2008) assert that the Internet and other networks have fosteredrapid communication, which has revolutionized illicit trades.Moreover, Campana (2016) and Levi (2008) contend that networks haveshaped criminal activities as they are dynamic and flexible, whichappeals to criminals greatly. Moreover, Haken (2011) cites thatcriminal organizations targeting the US operate in countries withweak governance and social disorder, as they offer opportunities forthe criminals to take shape. The organizations then exploit orutilize diaspora communities in America as cover for their operationsoften using networks and the internet. Today, the use of virtualcurrency such as Zen and Bitcoins has transformed organized crime andhas often allowed money launderers and people who deal with illegalprostitution and drug use to pay or receive payments anonymously andfreely. The use of these peer-to-peer networks has made it difficultfor governments to trace the criminals especially money launderers incountries with conventional technological systems.
On the other hand, criminalsdealing in these illicit trades have used borders as opportunities tocarry out their activities. For example, criminals have traditionallyand dynamically used the US-Mexican border to traffic drugs to theUS, which has contributed significantly to illicit drug use. Ferragut(2012) asserts that in most parts of the world, criminals takeadvantage of the weaknesses in customs and transportation to developtheir trades. Criminal networks smuggle humans, cash, and narcoticsaround the globe by preying on the flaws in global transportation andcustoms security procedures. Moreover, the criminals use theircontraband with the increased volume of legal international tradethrough containerized shipping. Traffickers, smugglers, and copycatshave contributed to the intensification of the trade by exploitingindividuals through sex and labor trafficking. Most victims viewborders as challenging barriers to migrating to the US, for example,via legitimate means thus, they turn to the offered illicit trade.However, the criminals use the victims to smuggle contraband or usethem in prostitution and trafficking drugs. Money launderers laundermoney from prostitution, human trafficking, and drug trafficking invarious means. Most criminals place or integrate the money intolegal, financial systems. The criminals, then layer the movement ofthe money through business structures and finally use the funds,which at this stage appear legitimate in legal activities ortransactions. Criminals use businesses and banks to launder money inoffshore accounts to countries such as the Cayman Islands and Panama,which have strict privacy laws. They also utilize shell companies orcorporations without assets or independent operations.
Effects of the illicit trades on economies
Accordingto Jenner (2011), America contributes roughly 60% of all drug usersin the world. Moreover, the highest percentage of prisoners inAmerica constitutes of drug users and traffickers thus, Americaneeds to formulate effective policies that define the use of drugs.The US penal code clearly defines illegal drug use and highlights theutilization that the law considers illegal. Research shows thatillegal drug use or mostly referred as drug abuse contributes tomoney laundering, violence, decreased development, and increasedhealth costs (Campana, 2016). Several studies that drug use isharmful to relationships, especially as it contribute to familybreakdowns (Ferragut, 2012). Most people who abuse drugs oftenexperience physical altercations and aggressive language. Moreover,drug use is costly to these people thus, they often engage inviolent activities to obtain money to buy more drugs, which oftenhurt family members. Most abusers especially those who take cocaineand heroin either end up in jail or die from malnutrition, whichcauses their families stress. Most abusers also become depressedespecially after long use of drugs, which affect their familiesnegatively. Illegal drug use is a major cause of death because of theillegal drug trafficking, as traffickers often engage in violentactivities to force people to become peddlers. Jenner (2011), forexample, reports that roughly 13,000 people were killed indrug-related killings between 2006 and 2009 in Mexico. Most of thesedeaths come from the corruption and violence associated with the saleof the illegal drugs. Drug use has also resulted to increased healthcosts, as countries, especially the US grapple with increaseddiseases related to the abuse.
Overtime, the dynamics of prostitution have changed greatly. Today,smugglers, traffickers, and other criminals have tricked women intoprostitution. Prostitution correlates greatly with violence, and druguse as most drug users obtain their drugs from prostitution dens. Inthis case, prostitution causes social, family, and personaldisorganization. People engaged in prostitution whether procured ortrafficked suffer from deterioration and moral disorganization aswell as lose their position and status they previously enjoyed in thesociety. Apart from the social disorganization, prostitution oftenburdens a country as it tries to cultivate programs to check thevice. Moreover, most prostitutes are at a high risk of contractingsex-related diseases such as HIV, which puts a burden on a country’shealth system. A good number of women in prostitution are physicallyassaulted, raped, and threatened. Cases of rape and assault forcethese women to suffer from depression and sometimes have thoughts ofsuicide. On the other hand, funds accumulated from the illegal tradessuch as prostitution and drug use contribute to socialdisorganizations, violence, and failure of some strictly legitimatebusinesses. Money laundering affects financial institutionsnegatively in managing their operations, assets, and liabilitieseffectively (Ferragut, 2012). Criminals deposit proceeds from illegalbusinesses to bank accounts, which then suddenly disappear withoutnotice, which affects the operations of these banks. In other cases,banks that deal with criminals in laundering money whether knowinglyor unknowingly risk closure by governments. Moreover, moneylaunderers often invest their proceeds in activities that do notessentially make a profit, as they only want to hide their source ofincome, which often affects economies negatively. Money launderersmay sometimes invest in beneficial activities to a country, but oncethe business activities do not protect their illegitimate businesses,they abandon the businesses thus, affecting economies. Furthermore,they affect government tax revenues and contribute to some violentactivities such as prostitution and drug use.
Proceedsfrom money laundering sustain the presence and increase the power oforganized crime. Most importantly, money laundering contributes toand supports other illegal trades such as prostitution and illegaldrug use. Moreover, the derailment of financial institutions,enhanced volatility of markets, and collapse of developing economiesas caused by money laundering result in political and socialdestabilization. Research illustrates that these destabilizationfuels the development of a thriving underworld of criminals (Haken,2011). The underworld does not respect individual rights or the ruleof law. In fact, Jenner (2011) shows that some countries, forexample, Mexico have experienced derailed progress and violation ofhuman rights by criminal gangs, especially those in drug trafficking.Furthermore, instances of corruption have sufficed, as criminalsoften bribe officials to smuggle cash and contraband. These aspectsthreaten the development of stable countries, fundamental libertiesof people, and the rights of legitimate market operators.
Responses of governments to the illicit trades
Theglobal nature of the illegal trades and money laundering has forcedgovernments to co-operate and cultivate programs or conventionsaligned to inhibiting the vices. Countries have created collaborativeprograms to share information relating to the trade as well ascreated international norms through international bodies to inhibitthe development of these illegal trades. Most of these programs havefocused mainly on money laundering while the countries have developedsocial-aligned programs to prevent illegal drug use and prostitution.Countries have created eradication, education, and interdictionprograms to respond to the activities, especially those relating todrug use. Countries have used the Interpol to combat global crime aswell as facilitate international cooperation (Schneider 2010). Thisinternational body has allowed countries to cultivate counteractmeasures to the illegal trades as well as gather information relatingto the activities of the criminals. The body also coordinates roles,centralize information, and deals with international and regionalauthorities in apprehending criminals. Moreover, the body coordinatesthe interdiction of criminals, notifies governments on the modusoperandi of criminals, and processes information through anelectronic database of criminal activities.
The UShas ratified laws regarding money laundering and introduced programsthat help the country identify weak areas. Moreover, the country hasused technology extensively and comprehensively to counteract thetricks used by traffickers and money launderers (Schneider 2010). Thejudicial system is organized in a way that ensures coordination ofactivities and information, which has greatly hindered the operationsof some organized criminals. Norms and laws on illegal drug use,money laundering, and prostitution have seen revisions andcomprehensive assessment identify the loopholes that criminal use aswell as allows the development of cooperative approaches. TheDepartment of Justice and numerous laws targeting drug use, moneylaundering, and prostitution have helped the US develop nationalstrategies to combat the illegal trades. The country continues tocreate new legislation, develop strict policies for scrutinizingsuspicious transactions, and pressure countries with shallow and poorcounter laundering controls. Most of these procedures and processeshave greatly hampered the works of organized crimes.
Despite the responses that the USand other governments across the world have committed or cultivated,organized crime continues to develop and transform (Haken, 2011).Most countries especially those with poor governance and socialdisorder fail to cooperate or lack comprehensive strategies to combatmoney laundering and trafficking, which affects policies in othercountries. It is worth noting that most of the drugs abused inAmerica come from elsewhere and so does proceeds from moneylaundering thus, if countries where these drugs and proceedsoriginated acted aggressively and developed dynamic strategies, thenthe war would be half-won. Money laundering, drug use, andprostitution have become global threats that pose immense challengesto law enforcers. Officers must familiarize themselves with thenature of most of these trades as well as understand the structuresthrough which the trades work. For example, to trail the evidentiarytrail of drug trafficking or money laundering, agencies mustrecognize and utilize tools that assist in international boundaries.
A greatcorrelation exists between illegal drug use, prostitution, and moneylaundering. Most of the proceeds from money laundering come fromprostitution and drug trafficking. Governments have responded harshlyto the trades, which in a way has inhibited the development oforganized crime. However, lack of adequate and effective inhibitorystrategies in some countries as well as technological advancementshas allowed criminals to develop and transform these activities.Moreover, widened transportation infrastructures and lack of enoughand effective checks in some borders have contributed to thedevelopment of money laundering and related activities. As such, lawenforcement agencies must develop efficient laws and strategies tocombat the activities as well as ensure that criminals do not violatethe rights of people.
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Jenner, M. S. (2011). International drug trafficking: A globalproblem with a domestic solution. Indiana Journal of GlobalLegal Studies, 18(2), 901-927.
Levi, M. (2008). Organized fraud and organizing frauds Unpackingresearch on networks and organization. Criminology andCriminal Justice, 8(4), 389-419.
Schneider, F. (2010). Turnover of organized crime and moneylaundering: some preliminary empirical findings. PublicChoice, 144(3-4), 473-486.