Archives For organized crime

Police are on high alert looking for a syndicate that uses donkeys to smuggle luxury cars across the Limpopo River into the Zimbabwe.

Thieves tied ropes to the cars which were hitched on to the donkeys to pull the cars across the river.

Some cars are driven through the drier parts of the river. On Tuesday, a Mercedes Benz C220 was intercepted before it disappeared into Zimbabwe.

“Our members were just in time to pounce on them after the donkeys were apparently no longer able to pull it through the sand,” Brigadier Motlafela Mojapelo  for the SA Police Service said.

The suspects fled into the bushes towards Zimbabwe side. Most of the cars are being smuggled across the river through the border between South Africa and Zimbabwe, south of Beitbridge border post.

In December, police recovered a Hilux bakkie when thieves attempted to smuggle it through the river. The bakkie was stolen in Durban.

It was semi-submerged in the water when Limpopo police commissioner Lieutenant-General Nneke Ledwaba spotted it from a helicopter while he was leading a high-density operation in Musina and Beitbridge.

The vehicle and donkeys were abandoned in the middle of the river and the suspect fled into Zimbabwe. It is not clear why the thieves do not simply driver the car into Zimbabwe – one reason might be that most modern cars are fitted with a tracking device which uses satellite tracking to locate a vehicle, if stolen. The tracker is only active when the car is running.

Mojapelo said 13 vehicles have been recovered since January this year. Thieves target luxury bakkies, SUV’s, specifically Toyota and Isuzu. Gauteng and KwaZulu-Natal are the two provinces that are mostly affected.

Last week, four vehicles were recovered. A Range Rover worth R900 000 was recovered after police intercepted it at the Beitbridge border post. The vehicle was en route to Malawi. The man was arrested and was found in possession of cash with an estimated amount of R30 000.

Mojapelo said the car had Limpopo registration numbers, but it was still unclear where it was stolen. Source: Pictures – SAPS and article – Iavan Pijoos, News24, 2 August 2017.

Arg-aduana

A customs fraud that allegedly allowed a criminal network to steal millions from Argentina’s government looks eerily similar to how some of Venezuela’s private businesses and corrupt government officials have also benefitted from that Andean nation’s efforts to manipulate currency values.

Argentine authorities conducted 23 simultaneous search warrants and arrested 10 individuals accused of defrauding the state by more than $300 million between 2012 and 2015, according to a July 11 press release by Argentina’s Security Minister.

The scheme was rooted in the difference between the dollar’s official value against the Argentine peso and its informal black market price. Authorities claim that 55 front companies were used to falsify Anticipated Sworn Declarations of Importation (Declaraciones Juradas Anticipadas de Importación – DJAI). These documents allowed import companies to buy dollars from the government at a subsidized price in order to buy foreign goods. Argentina’s previous administration artificially boosted the value of a peso, so an official dollar was worth much less than on the black market. But under the scheme, DJAIs were produced for goods that were never imported and with the sole purpose of buying cheaper official dollars, before selling them at a much higher price on the black market exchange.

The investigation, initiated last year after an official complaint from the director of Argentina’s customs agency, focuses on a network of textile companies owned by members of Buenos Aires’ Korean community, according to Infobae.

Infobae, which described the well-structured network integrated by professional accountants as a “mafia,” notes that not a single official has been charged for corruption, even though the official press release admits that bribes were paid.

The scheme currently investigated in Argentina illustrates how organized crime can profit from government monetary policy, as well as a good dose of corruption.

The sum involved may appear large, but other regional country’s losses to such frauds are measured in percentages of the gross domestic product and reach the highest levels. In Guatemala, for example, corruption reached as high as the president, who was directly leading and benefitting from a vast customs fraud, according to government investigators prosecuting the case.

Argentina’s case, however, appears to have more similarities to Venezuela. Indeed, the latter’s government control of currency exchange rates and the sale of dollars was exploited to embezzle as much as $70 billion in a decade, reported The New York Times. And following a regional pattern, corruption stood as a primary factor enabling these frauds.

Source: InsightCrime.org and WCO IRIS Portal

Customs officers in Hong Kong seized 7.2 tons of ivory from a shipping container arriving from Malaysia on July 4.

The seizure was made at the Kwai Chung Customhouse Cargo Examination Compound, and once its weight is confirmed, the haul could become a record seizure – the largest ever recorded in the Elephant Trade Information System (ETIS) database – narrowly surpassing the 7.138 tons seized in Singapore in 2002.

According to a government media release, the consignment was declared as “frozen fish” and the tusks hidden beneath frozen fish cartons.

The massive seizure underlines both Malaysia’s and Hong Kong’s role as key smuggling hubs in the international trafficking of ivory. Three people – a man and two women were arrested in connection with the seizure.

The ETIS database is managed by the NGO TRAFFIC on behalf of Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). It contains tens of thousands of elephant-product seizure records dating back to 1989.

Under CITES guidelines, any seizure of 500kg or more is considered indicative of the involvement of organized crime. All parties making such large-scale seizures are obliged to examine them forensically as part of follow-up investigations.

Dr Yannick Kuehl, TRAFFIC’s Regional Director for East Asia, said, “No doubt Hong Kong’s geographic location coupled with the currently relatively lenient penalties in place for anyone convicted of wildlife crime are reasons behind the shipment coming through the port. The case for increasing penalties has never been stronger.”

Hong Kong is currently reviewing its legislation regarding wildlife crime and the Legislative Council is currently debating plans to phase out the territory’s domestic ivory trade over the next five years, a timescale that is out of step with neighboring mainland China which intends to end its domestic ivory trade by the end of 2017. Source: Maritime Executive/TRAFFIC/HongKong Government – Photo’s: Alex Hofford/WildAid.

cigarettes

The Zimbabwe Herald suggests that Zimbabwe could be losing millions of dollars in unpaid taxes due to rampant smuggling of cigarettes into South Africa, investigations by this paper have revealed.Between 2014 and 2015, local customs officials seized nearly 2 500 cartons worth around $500 000 in taxes, according to the Zimbabwe Revenue Authority.

Figures from the South African side are staggering, showing a wide discrepancy in the value of confiscated contraband between the two neighbouring southern African countries.

The South African Revenue Service told The Herald Business that it had seized R87 million (US$6,2 million) worth of Zimbabwean cigarettes since 2014, or 95 million sticks.

This will likely be worth millions of dollars in evaded tax in Zimbabwe, but the ZIMRA director for legal and corporate services Ms Florence Jambwa said the figures were difficult to determine because smuggling was an underground trade.

South Africa, however, says it loses an estimated R40 million (US$2,9 million) to cigarette smuggling each year, on the average, more than half of it Zimbabwe-related.

And this is just from what is on public record. Customs officials from both countries admit the figures could be higher. Both are also greatly incapacitated to detect illegal trades quickly.

“It is difficult to measure the levels of smuggling as this is an underground activity mostly done through undesignated entry points,” said ZIMRA’s Jambwa, by email.

“The value of the potential loss cannot be easily ascertained,” she said, failing to provide an estimate.

Tax analyst Mr Tendai Mavhima said the figures from ZIMRA represent only a small portion of the actual amount of money Zimbabwe is losing to trafficking of cigarettes.

“The disparity in figures (ZIMRA and SARS figures) indicate there are problems in controls on either side, which may result in the revenue and tax losses from both countries being understated,” he said by telephone.

Zimbabwe is the world’s fifth largest producer of tobacco after China, the USA, Brazil and India.

The country produces flue-cured Virginia tobacco, considered to be of extremely high quality and flavour, according to a report on Zimbabwean tobacco companies by local stockbroking firm, IH Securities.

As such, Zimbabwean tobacco ends up in many top cigarette brands across the world, it says.

It is especially popular in China, the largest importer of Zimbabwean tobacco, and in South Africa, the country’s largest trading partner.

In South Africa, Zimbabwean cigarettes are on demand for two key reasons: high quality and affordability.

It costs just $1,50 for 20 sticks in Zimbabwe compared to $3,20 for the same number of sticks in South Africa, according to estimates by regional economic bloc, SADC.

The South African Revenue Service (SARS) said: “Cigarette clientele opt for cheaper cigarettes. The high supply and demand for illicit cigarettes creates the market for it.”

South Africa imposes very high taxes on cigarette imports – about 80 percent meaning many Zimbabwean dealers choose to export illegally.

SADC says illegal dealers supply nearly two thirds of the number of cigarettes smoked by South Africans.

In 2011 alone, at least 4 billion cigarettes smuggled into South Africa originated from Zimbabwe, it says.

The undeclared cigarettes are usually concealed in trucks, buses and other vehicles destined for South Africa by organised cartels, said Florence Jambwa of ZIMRA.

Sometimes the cargo is shipped at undesignated points on the porous border between the two countries. Source: Zimbabwe Herald

kunio-addressing-cop17At the invitation of the South African Minister of Environmental Affairs, Secretary General Kunio Mikuriya addressed a “Ministerial Lekgotla” held in Johannesburg, South Africa, on 23 September 2016 as an introduction to the CITES CoP 17 World Wildlife Conference.

During the high-level panel session, Secretary General Mikuriya focused on the role of Customs in facilitating legal trade and intercepting illegal trade in wildlife and on its link to CITES and Sustainable Development Goals.

He highlighted the WCO Declaration on the Illegal Wildlife Trade, which had been adopted in 2014 and aimed at drawing the attention of policy makers to environmental crime and at raising the priority of Customs operations in this area.

He also referred to the INAMA project (started in 2014) for technical and capacity building assistance for Customs on risk management, collaboration with other law enforcement agencies and institution building to enhance integrity.  Cooperation with the transport industry was also part of the WCO efforts to improve compliance, as exemplified in the Royal Foundation Task Force Declaration on Transport, adopted earlier this year.

The presence in Johannesburg of high-level delegations also provided an opportunity for the Executive Heads of the International Consortium on Combating Wildlife Crime (ICCWC) to meet in order to further enhance the collaborative work with the CITES Secretariat, INTERPOL, the UNODC, the World Bank and the WCO.

Fianlly, Secretary General Mikuriya also had a series of bilateral meetings with key partners, including with Executive Director Erik Solheim of the United Nations Environment Programme. Source: WCO

Raw-gold-619x413Global Trade Review reports that trade mis-invoicing is costing some developing countries two-thirds of the value of certain commodity exports.

New data gleaned from two decades of export figures emphasises the tens of billions of dollars being lost from the global economy to the under-invoicing of commodities from Africa and South America.

Between 2000 and 2014, 67% of the value of total gold exports were lost from South Africa through under-invoicing – when an invoice states a price as a lower value than is actually being paid.

Also read Maya Forestater’s blog post Misinvoicing or misunderstanding? for an alternative explanation regarding the UN’s claims in its recent report Trade Misinvoicing in Primary Commodities in Developing Countries.

This is often done to avoid paying taxes and is one of the most common methods of trade-based money laundering. The total loss in this particular commodity export amounts to US$78.2bn. More than half of this is lost on the trade of gold between South Africa and India.

From 1996 to 2014, the mis-invoicing of oil exports from Nigeria to the US was worth US$69.8bn. This is the equivalent value of one-quarter of all oil exports to the US.

The data from the UN Conference on Trade and Development (UNCTAD) shows that in the 20 years from 1995, more than half of Zambia’s total copper exports fell victim to misinvoicing, with US$28.9bn-worth not showing up on the books of Switzerland, the primary market.

From 1990 to 2014, Chile lost US$16bn in potential taxable revenue in the copper trade to the Netherlands, while the Netherlands did not record US$5bn in cocoa exports from Côte d’Ivoire between 1995 and 2015.

This is the first large-scale analyses of under-invoicing for specific commodities and countries,  despite the fact that the practice has been so rife for decades.

More awareness has been raised to the practice in recent years – in no small part due to the work done by not-for-profit organisations such as Global Financial Integrity (GFI) – but the lack of resources allocated to its eradication in much of the world, coupled with the culpability of many officials around the world, means that little progress has been made.

There is still no global standard against trade-based money laundering as there is against, for instance, sanctions breaching. The fact that it pre-dates most formal financial systems also means that any measures taken to stop it are difficult to enforce.

“When we talk about illicit financial flows we’re always talking about curtailing it, because there’s not going to be any situation in which any set of policies is going to entirely limit criminal behaviour. We have many, many laws on the books and folks break them all the time. But if you can make it as difficult as possible for folks to engage in this kind of thing, you’re doing what you’re supposed to do it,” Liz Confalone, policy counsel at GFI tells GTR.

The report also brings to attention the practice of over-invoicing – whereby the price of a good is fraudulently increased, allowing the exit of illegal money from an economy. Often, this money is connected to the narcotics trade, or to other criminal activity.

The UNCTAD report reads: “Puzzling results also emerge at the trading partner level. Trade with the Netherlands presents a peculiar case, with systematic and substantial export over-invoicing. It appears that primary commodities exported to the Netherlands never dock in the Netherlands.

“The question is whether this is the outcome of smuggling or incorrect reporting of the residence of the buyers. Answering this question may require an investigation at the company level.”

The authors call on a three-pronged attack on trade mis-invoicing, encompassing greater government scrutiny of particular commodity sales, an improvement in trade statistics and greater transparency in certain jurisdictions.

They write: “The results from this study highlight the need for an investigation into the role of transnational corporations involved in the exploitation, export and import of commodities, as well as the role of secrecy jurisdictions in facilitating trade mis-invoicing.

“Such an investigation may shed light on the mechanisms of export over-invoicing and import smuggling. Enhanced transparency in global trade is indispensable, especially through co-ordinated enforcement of the rules on country-by-country reporting by TNCs at the global level.”

Speaking to GTR recently, Jolyon Ellwood-Russell, a Hong Kong-based trade finance partner at law firm Simmons & Simmons, called for more joined-up thinking on an intergovernmental level if the problem is to be tackled.

Praising moves by the Hong Kong Monetary Authority and the Monetary Authority of Singapore to clamp down on trade-based money laundering, he said: “The issue is that the techniques and methods are very complex and don’t necessarily fit into those existing countermeasure programmes. Both banks and regulators could probably benefit from a better understanding of trade finance structures and how they are used in trade-based money laundering.” Source: Global Trade Review

Authorities on both sides of the US-Mexico border have shut the 10th drug-smuggling tunnel to San Diego in more than a decade, a passageway Mexican authorities on Thursday attributed to the cartel of fugitive kingpin Joaquin “El Chapo” Guzman.

A sophisticated, super tunnel was discovered by federal officials Wednesday night near San Diego, leading to the arrest of 22 people and confiscation of 12 tons of marijuana estimated at $6 million.

The tunnel, originating from the Mexican border city of Tijuana, is about eight football fields in length, with the last quarter-mile crossing US territory before ending beneath a carpet warehouse in the busy Otay Mesa industrial district of San Diego, US and Mexican officials said.

The tunnel was uncovered through intelligence gathered by US federal agents who infiltrated a Mexican drug-smuggling ring during the past six months, according to Laura Duffy, the US Attorney in San Diego.

It marked the 10th subterranean passageway from Mexico to Otay Mesa discovered since 2002. Like those and dozens of others found along the nearly 3 200km border in the last decade, the latest tunnel was equipped with lighting, ventilation and a rail system for moving goods, authorities said.

Two Mexican government security officials, speaking on condition of anonymity, told Reuters the latest passage belonged to the Guzman-led Sinaloa drug cartel.

Duffy said US officials were less certain that Sinaloa was behind the new tunnel, based on the comparatively unfinished, dangerous nature of the tunnel shaft on the US side.

“We usually see ladders going down and staircases,” she said.

“This particular tunnel drops 32 to 35 feet straight down.”

Duffy said US federal agents moved to seize control of the tunnel on its north end on Wednesday after a shipment of 2 tons of marijuana arrived there, and six men were arrested, two of whom were to be arraigned on federal drug-smuggling charges on Thursday.

Mexican agents seized 10 tons of marijuana awaiting shipment through the passage at the Tijuana side, and authorities expect to find more contraband when a thorough search of the tunnel is made, Duffy said.

Guzman, the world’s most wanted drug trafficker, escaped in July from a Mexican maximum-security prison through a mile-long tunnel that surfaced right inside his cell.

His escape sparked a massive manhunt, and Mexico’s government said on Friday that Guzman had suffered injuries to his face and leg after recently beating a hasty retreat from security forces. Source: IOL

Smuggled Ivory

In January 2014, while x-raying a Vietnam-bound container declared to hold cashews, Togolese port authorities saw something strange: ivory. Eventually, more than four tons was found, Africa’s largest seizure since the global ivory trade ban took effect in 1990. [Photo: Brent Stirton, National Geographic]

Last year, one of Kenya’s most adored elephants, Satao, was killed for his ivory. Poachers shot the bull elephant with a poisoned arrow in Tsavo East National Park, waited for him to die a painful death, and then hacked off his face to remove his massive tusks.

Poachers continue to kill an estimated 30,000 elephants a year, one every 15 minutes, fueled to a large extent by China’s love of ivory. Thirty-five years ago, there were 1.2 million elephants in Africa; now around 500,000 remain.

A recent documentary, 101 East, released by Al Jazeera, traces the poaching of elephants and smuggling of ivory from Tanzania’s port of Dar es Salaam through the port of Zanzibar to Hong Kong and Shanghai.

Hong Kong is one of the busiest ports in the world. It handled nearly 200,000 vessels last year and is a key transit hub for smugglers transporting ivory from Africa to China. Between 2000 and 2014, customs officials seized around 33 tons of ivory, taken from an estimated 11,000 elephants.

With the huge challenge faced by customs and other law enforcement agencies in West Africa, wildlife crime is on the rise. Regional traffickers and organized crime groups are exploiting weak, ineffective and inconsistent port controls throughout the region.

U.N. Action in Africa
To address the issue, the United Nations Office on Drugs and Crime (UNODC) organized a workshop in Accra, Ghana, from August 25 to 27 August, and in Dakar, Senegal, from August 31 to September 2. The objective was to provide training for national law enforcement agencies to better fight wildlife crime through the control of maritime containers. The workshop was led by trainers and experts from UNODC, the World Customs Organization (WCO) and the CITES Management Authority.

The Container Control Programme has been developed jointly by UNODC and WCO to assist governments to create sustainable enforcement structures in selected sea and dry ports to minimize the risk of shipping containers being exploited for illicit drug trafficking and other transnational organized crime. The implementation of the program is an opportunity for UNODC to work with governments in establishing a unit dedicated to targeting and inspecting high-risk containers.

UNODC, in partnership with WCO, delivers basic training programs and provides technical and office equipment. For example, the equipment connects the units to the WCO’s ContainerCOMM – a restricted branch of the Customs Enforcement Network dedicated to sharing information worldwide on the use of containers for illicit trafficking.
Sustainability.

UN Secretary-General Ban Ki-moon argues: “Illegal wildlife trade undermines the rule of law, degrades ecosystems and severely hampers the efforts of rural communities striving to sustainably manage their natural resources.”

Wildlife trade is a transnational organized crime that raises profits of about $19 billion annually. In addition, it is often linked to other crimes such as arms trafficking, drug trafficking, corruption, money-laundering and terrorism – that can deprive developing economies of billions of dollars in lost revenues.

Shipping
It’s hardly surprising that many of the big ivory seizures made in recent years have been detected in shipping containers, says Dr. Richard Thomas, Global Communications Coordinator for the environmental organization TRAFFIC. “Partly that’s due to the sheer quantity of ivory being moved (the largest-ever ivory seizure was 7.1 tons) – which from a practical and cost point of view makes sea carriage more attractive than air carriage.

“Also in the smugglers’ favor is the huge numbers of containers moved by sea. Some of the big ports in Asia deal with literally thousands of containers per day. Obviously it’s not practical or feasible to inspect each and every one, and that’s something the organized criminal gangs behind the trafficking rely upon.”

There’s lots of issues to be dealt with, says Thomas: For example, even when an enforcement agency makes a seizure, it’s not easy to find out who actually booked the passage for the container and who knew precisely what was in it and actually put it there. “That’s one area where transport companies can collaborate with enforcement agencies to assist follow-up enquiries. Obviously companies have records of where the container is headed too, obviously key information for follow-up actions,” says Thomas.

TRAFFIC recently ran a workshop in Bangkok under the auspices of the Wildlife Trafficking Response, Assessment and Priority Setting (Wildlife TRAPS) project, targeting the movement of illicit wildlife cargoes across borders.

“The transport industry can serve as the eyes and ears of enforcement agencies as part of a global collaboration to eliminate the poaching and trafficking of illegal wildlife commodities,” said Nick Ahlers, Leader of TRAFFIC’s Wildlife TRAPS project.

“To be successful, the entire logistics sector needs to be part of a united push to eliminate wildlife trafficking from supply chains. In particular, we would welcome participation from major shipping lines and the cargo and baggage-handling sector.”

If nothing is done to stop the ivory trade, Africa’s wild elephants could be gone in a few decades. Source: Reuters.

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