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Details on Cocaine Trafficking

·Regional
Forensic investigator collecting evidence at a nighttime scene, representing investigative work linked to cocaine trafficking

The Financial Action Task Force (FATF) does not refer specifically to cocaine in its policies, but its remit covers the fight against money laundering and terrorist financing, which includes the handling of proceeds from illegal activities such as drug trafficking. Related documents, such as sector assessments, identify risks associated with laundering the proceeds of these unlawful activities, including the production and trafficking of cocaine.

In Colombia

A comprehensive view of the global cocaine market places Colombia as the leading producer, with a significant increase in coca leaf cultivation in 2022. Within the figures on global cocaine consumption, North America leads in number of users. Worth noting too are the new strategies of Colombian president Gustavo Petro for tackling the drug problem from a public health and sustainability perspective.

Some figures

  • Cocaine is consumed globally, but its cultivation is concentrated mainly in Colombia, Peru and Bolivia.

  • In 2022, the area given over to coca cultivation in Colombia grew by 13%, reaching 230,000 hectares.

  • Colombia accounted for almost two thirds of all coca cultivation worldwide in 2022.

  • Colombian president Gustavo Petro proposed a public health approach to the fight against drugs rather than a military one.

  • Petro presented a national anti-drug plan seeking to reduce coca crops and support farmers in the transition to lawful economies.

  • North America has the highest rate of cocaine use, with 6.5 million users, representing 28% of the world total in 2022.

  • The Americas as a whole account for close to half of all estimated cocaine users worldwide.

Sources: UNODC — Government of Colombia

In Peru

The report issued by the Superintendence of Banking, Insurance and Pension Funds, ANALYSIS OF ILLICIT DRUG TRAFFICKING AS A PREDICATE OFFENCE OF MONEY LAUNDERING, sets out how illicit drug trafficking evolved as a predicate offence of money laundering in Peru between 2012 and 2022. It highlights that Peru ranks second in the world for coca cultivation, with a marked rise in production and in seizures of chemical precursors. Over that period the Financial Intelligence Unit (UIF) received more than 120,000 Suspicious Transaction Reports (STRs), a significant share of them linked to drug trafficking, which underlines the need for effective prevention and control policies.

Some figures

  • Coca cultivation: Peru is the world's second largest coca producer, with 95,000 hectares under cultivation in 2022.

  • STR trend: since 2012, the UIF-Peru has received more than 120,000 STRs, with illicit drug trafficking as the predicate offence in 9.9% of those cases.

  • Chemical precursors: a 63% increase was recorded in 2022 in seizures of the chemical inputs needed to produce cocaine.

  • Production areas: the main coca-growing areas are the VRAEM, Inambari-Tambopata and the Lower Amazon.

  • Profile of those reported: most individuals named in STRs are Peruvian, aged between 25 and 45, and involved in commercial activities.

  • Reporting entities: 29.8% of drug-trafficking-related STRs come from money transfer companies.

  • Money laundering convictions: 175 money laundering convictions were handed down between 2012 and 2021, with drug trafficking the most common predicate offence.

Source: SBS report

In Ecuador

Cocaine trafficking in Ecuador is a complex matter involving multiple factors and actors, described as "the cocaine superhighway to the United States and Europe".

As a transit country, Ecuador receives most of the cocaine that passes through its territory from Colombia. Although there is much speculation about the exact quantity entering from its neighbour, in 2019 the Ecuadorian authorities reported that more than a third of the cocaine produced in Colombia transited through Ecuador. Other sources, including US authorities, suggest the figure is considerably higher. Taking the one-third figure as a reference, it is possible to estimate the quantity of cocaine transiting Ecuador, observe how that quantity has risen in recent years and analyse how that rise has coincided with the increase in homicides.

Some figures

  • Production in neighbouring countries: the cocaine reaching Ecuador usually comes from neighbouring countries such as Colombia and Peru, both major producers. These countries have coca plantations and laboratories where cocaine is processed.

  • Transport and trafficking: Ecuador is a transit country for cocaine trafficking because of its geographical position and its ports. Traffickers use sea and land routes to move cocaine from producer countries to international markets. Ports on the Ecuadorian coast, such as Guayaquil, are key transit points. Seized bricks have been found labelled with airline names indicating their destinations: Iberia, KLM, Qatar, AB, JET2.

  • Local distribution networks: within Ecuador there are local distribution networks that handle the cocaine once it arrives. These networks are often linked to criminal organisations that control different regions and hold influence in various parts of the country.

  • Corruption and security challenges: cocaine trafficking in Ecuador is associated with corruption problems and security challenges. Criminal organisations often try to bribe officials and hold influence in some parts of the police and of politics.

  • Impact on society: cocaine trafficking has multiple negative impacts in Ecuador, including rising violence, social decay and public health problems. Gang wars and clashes with the authorities add to insecurity in several areas.

  • Control and prevention measures: the Ecuadorian government, together with international cooperation, is working to implement strategies to combat drug trafficking, including interdiction operations, strengthening security institutions and promoting prevention and rehabilitation programmes.

Sources: UNODC — Government of Ecuador

Some conclusions

  1. Cocaine trafficking is frequently associated with violence, corruption and organised crime. Criminal gangs often clash over control of the market and of trafficking routes.

  2. Cocaine is transported from producer countries to international markets. That transport may be by land, sea or air. Traffickers use complex routes and are often involved in smuggling and in evading the authorities.

  3. Transit countries such as Ecuador play a crucial role in cocaine trafficking, acting as intermediaries between producers and consumer markets.

  4. Cocaine is sold on the black market at very high prices compared with its production cost. Sales may take place in clubs, bars, on the street or through clandestine networks.

  5. Once in the destination country, cocaine is distributed through local trafficking networks. These handle wholesale and retail sales, often infiltrating communities and using violent methods to maintain control.

  6. The main markets for cocaine include the United States, Europe and other regions, where demand is high and distribution networks are well established.

  7. Governments and international bodies are currently implementing strategies to combat cocaine trafficking, including interdiction operations, international cooperation and prevention and addiction treatment programmes.

At Líderes Empresariales APLA we specialise in training and advising compliance officers, and in implementing money laundering, terrorist financing and proliferation financing prevention rules for the various obligated entities. If you need help, do get in touch.

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