The global black market is estimated to be worth us$1.8 trillion.

Colombia

Deep in the equatorial jungle, Colombian cocaine smugglers have been building submarines up to 30 meters long, capable of transporting tons of cocaine undetected through the Caribbean from Colombia to the USA. Colombian cocaine production peaked in 2000 and decreased by more than half in the following 10 years (Peru is now the world’s top cocaine producer), but growing it isn't the most profitable part of the industry. The real money is in taking the product to market.

The going rate for a gram of cocaine in Bogotá is US$3.50, but the same gram can sell for $120 in New York. The difference goes to the people who transport it and eventually sell it, and since US and Colombian authorities tightened controls over Colombia’s traditional smuggling routes in the 1980s, the money for transportation has gone to Mexican drug cartels, which bring Colombian cocaine to the US overland. Drug-market analysts call it the “balloon effect”: squeeze the drug trade in one place and it will pop up somewhere nearby. More than 97 percent of cocaine’s street value in the US goes to the criminal organizations involved in its distribution, rather than remaining in Colombia; and many of those huge profits are laundered through multinational banks to disguise their illegal origins.

Half of the cocaine seized in Europe every year is intercepted by Spanish authorities.

In 2009 alone, $300 billion of drug-trafficking money entered the financial system to be concealed and then used for legal transactions, according to the United Nations. A year later, US bank Wachovia admitted to having failed to monitor $376 billion that passed through its accounts on its way to financing Mexican drug gangs from 2004 to 2007.

In 2012, British multinational bank HSBC was fined $700 million for having facilitated transactions by Mexican drug traffickers and financiers of Al Qaeda. Major banks found to have been involved in illicit transactions include ABN AMRO, Barclays, CreditSuisse and ING. “In many instances, the money from drugs was the only liquid investment capital available... at the height of the [2008 financial] crisis,” Antonio Maria Costa, ex-head of the United Nations Office on Drugs and Crime, told British newspaper The Observer in 2009. Today, the online black-market database Havoscope estimates today’s global black market at $1.8 trillion. And much of it is whitewashed.

 

Duty free: What customs doesn’t see

32 drugs-006Fuel

In Kosovo, an oil-smuggling operation worth an estimated US$100 million has helped heal deep ethnic divides. Ethnic Serb Kosovars smuggle oil into Kosovo from Serbia in collaboration with Albanian Kosovars, who ship it to gas stations all over the republic.

32 drugs-007Havana Cigars

Luxury Havana cigars are only available in the US on the black market. They were banned in 1963, when US President Kennedy imposed a trade embargo on Cuba. The day before authorizing the sanction, he had 1,200 such cigars stockpiled for his personal consumption.

32 drugs-008Human Bones

Vertebrae fetch US$43 each; a skull with teeth: $1,200. US medical schools pay well for clean human bones to study, and India sells the highest-quality skeletons. Exporting human remains was banned in India in 1985, but grave robbers in West Bengal are keeping the trade alive.

32 drugs-009Vodka

In 2004, 11 smugglers pumped 6,200 liters of vodka into Estonia from Russia through a 2-kilometer underwater pipeline. Over the past 20 years, half of all the deaths of people aged between 15 and 54 in Russia were alcohol-related.

 



From the pages of COLORS #85 - Going to Market.