According to a new report released by the United Nations, profits from criminal activities worldwide exceeded $2.1 trillion in 2009. But as a breakdown of this figure reveals, these profits vary widely across regions and criminal groups.

As the report, by the United Nations Office on Drugs and Crime, (available here as a PDF) points out, this represented 3.6 percent of global gross domestic product that year. Of this $2.1 trillion, the report’s authors claim that some $870 billion is related to drug trafficking and organized crime. The majority of this sum ($580 billion) is laundered through various financial institutions. This clashes with the argument of analysts such as Alejandro Hope, who argue that the high operating costs of running a drug trafficking organization, combined with the fact that cash is more difficult to trace, makes it likely that drug gangs prefer to keep their funds in hard currency.

The report’s most interesting findings stem from its chosen case study: the money flows of the international cocaine trade. Unsurprisingly, those who cultivate the coca plant are at the bottom of the profit pyramid when it comes to cocaine. For their coca production, Andean farmers in Peru, Colombia and Bolivia collectively received just $1 billion in 2009, which amounts to slightly more than one percent of the $85 billion in total profits from the cocaine trade.

In contrast, the majority (about $61 billion) in profits was generated inside the U.S. and Europe, which are the two largest markets for the drug in the world. The remaining money mostly came from transit costs and local demand. While the report does not go into details about the distribution of these proceeds, its authors claim that the largest portion goes to South American groups, most notably Colombia-based drug trafficking organizations, who are estimated to have made $3.3 billion from shipping the drug out of the region. If true, this illustrates the incentive for Mexicans to deepen their connections in producing countries, a phenomenon that InSight Crime has documented.

But while Mexican drug trafficking groups still depend on Colombian counterparts to supply them with cocaine, they make up for the costs in the tremendous profits resulting from selling the drug to distributors in the United States. For just moving the drug across the border, drug trafficking organizations made an estimated $2 billion in 2009. It is estimated that another $5 billion in profits was generated by larger-scale drug cartels with their own distributors in the United States, such as the Zetas and Sinaloa Cartel

The report’s main argument, however, is that the importance of tracking illicit funds cannot be overstated. Calling for “comprehensive, all inclusive participation” in international anti-money laundering efforts, the authors argue that efforts at seizing illicitly made money may in the long run be more damaging to criminal infrastructures than taking down drug kingpins, as the latter are easily replaced. Unfortunately, the ability of law enforcement agencies around the world to identify and seize these illicit cash flows remains severely limited. The report estimates that less than one percent of illicit money is ever seized, meaning that money laundering remains an attractive and relatively easy option for transnational criminal groups.

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