The Evolving Nature of Transnational Crime

Rick Penney
December 22, 2016
By Rick Penney
Transnational crime and transnational organized crime (OC) are complex and have multiple definitions; moreover, there are blurred distinctions between domestic and foreign affairs as criminals exert a global impact.

According to the 2000 United Nations (UN) Convention on Transnational Organized Crime, transnational refers to offences that involve at least two countries.

The UN has identified 18 categories of transnational offences, which include money laundering, theft of intellectual property, art and cultural objects, illicit arms trafficking, aircraft hijacking, sea piracy, insurance fraud, computer and environmental crime, trafficking in persons and human body parts, illicit drug trafficking, fraudulent bankruptcy, infiltration of legal business, and corruption and bribery of public or party officials.

The American National Security Council defines transnational organized criminals as those who act conspiratorially in their criminal activities and possess certain characteristics that may include the following:
  • In at least part of their activities, they commit violence or other acts that are likely to intimidate, or make actual or implicit threats.
  • They exploit differences between countries to enrich their organization, expand its power, and/or avoid detection or apprehension.
  • They attempt to gain influence in government, politics and commerce through both corrupt and legitimate means.
  • Their primary goal is economic gain, not only from patently illegal activities but also from investment in legitimate businesses.
  • They attempt to insulate both their leadership and membership from detection, sanction, and/or prosecution through their organizational structure.
There are various examples of commodities that are used for profit by transnational organized criminals: cigarette smuggling, antiquities theft, counterfeit currency, jewel trade, drugs, human smuggling and alcohol smuggling.

Canada and a historical perspective
What makes Canada so attractive to criminal organizations? Simply put, there’s a deep history of opportunity that has made Canada an excellent place for transnational criminals to do business.

For example, Brigus Tunnel in Newfoundland was hand blasted in the summer of 1860 to provide unhindered access to Abram Bartlett’s Wharf. It was constructed by John Hoskins, a Cornish miner, using steel spikes and black gun powder.

Measuring 80 feet long, eight and a half feet high and eight feet wide, the tunnel represented an early engineering feat that took about four months to complete. Holes formed by steel spikes driven into solid rock were then filled with black gun powder and blasted during its construction.

The purpose of the tunnel was to provide access to a deep water berth for the Bartlett sailing ships and the distribution of contraband alcohol. For many years, there was a thriving smuggling trade between the French island colonies of St-Pierre-Miquelon and the United States, the Bahamas and Newfoundland. With American Prohibition from 1919 to 1933, the French islands’ illegal practice took on worldwide proportions and created a lucrative transnational criminal network. Alphonse Gabriel “Al” Capone was an American gangster who led a Prohibition  era crime syndicate. The Chicago Outfit, which subsequently became known as the “Capones,” was dedicated to smuggling and bootlegging liquor and other illegal activities such as prostitution, in Chicago from the early 1920s to 1931. Capone needed refuge from the law and so he had cottages in far out places built around Canada and the United States.

Fast forward to today, where there are criminal organizations from the former Soviet Union operating in Canada that specialize in crimes such as fraudulent use of Internet data, cybercrimes and hacking into Canadian consumer data, and selling the information back home to such places as Chechnya and Georgia.

Criminal organizations from the Balkans and former Yugoslavia use Canada as a base to broker cocaine deals in order to move cocaine back to the homeland, as well as being influential in the crossborder movement of marijuana to the United States. More recently, there’s been evidence of a definite cartel presence in Canada, specifically Mexican cartels. The roles of those individuals within Canada are very much those of gatekeepers, involved in the importation and distribution of cocaine, as well as logistics and money laundering/ currency movement.

Competitive and strategic markets
Transnational OC presents a threat to national economic interests and can cause significant damage to the world financial system through its subversion, exploitation and distortion of legitimate markets and economic activity.

Many nations worry that firms are being put at a competitive disadvantage by transnational OC and corruption, particularly in emerging markets where many perceive that the rule of law is less reliable.

The price of doing business in countries affected by transnational OC is also rising as companies budget for additional security costs, adversely impacting foreign direct investment in many parts of the world. Transnational OC activities can lead to disruption of the global supply chain, which in turn diminishes economic competitiveness and impacts the ability of many industrial and transportation sectors to be resilient. Further, transnational criminal organizations that leverage their relationships with state-owned entities, industries or state-allied actors, could gain influence over key commodities markets such as gas, oil, aluminum and precious metals, along with potential exploitation of the transportation sector.

The World Bank estimates about $1 trillion is spent each year to bribe public officials, causing an array of economic distortions and damage to legitimate economic activity. Moreover, according to the United Nations Office for Drugs and Crime (UNODC), “the annual turnover of transnational organized crime activities such as drug trafficking, counterfeiting, illegal arms trade and the smuggling of immigrants is estimated at around $870 billion.”
In Canada, it’s estimated that the amount laundered on an annual basis is somewhere between $5 and $15 billion.

Trends to watch
Key players in transnational crime include outlaw motorcycle gangs, drug cartels, pirates and, in some instances, government officials, such as politicians and police. With corruption comes the threat of violence to public safety officials and the threat of instability to the economy and national security. The use of bribes and pay-offs is the cost of doing business for many transnational criminal organizations — it’s a factor in their bottom line and the way in which the groups operate.

In recent years, numerous criminal organizations have found the benefit of maintaining a symbiotic relationship by enmeshing themselves within a legitimate environment. For example, infiltrating the ranks of government and thus dealing with one of their own is often the best way to ensure co-operation by government institutions. This type of infiltration is found in key ports of entry such as Toronto’s Pearson International or the Port of Montreal.
Legitimization is another trend among transnational criminals. Many groups attempt to distance themselves from the illegal aspects of their operations by involving themselves in legitimate business ventures that are funded by almost bottomless profits acquired through criminal activities.

Others seek civic legitimacy by donating to community hospitals, charities, universities and political parties. They also try to have their photographs taken with high-ranking government officials or other high-profile personalities.
Co-operation among transnational crime organizations, already a major factor in the new world order of crime, is expected to continue and expand. Partnerships, bartering arrangements and alliances, either short or long term, allow these syndicates to better evade law enforcement agencies, share existing infrastructure and improve risk management.

The sophistication of transnational crime is expected to increase. For instance, members of transnational criminal organizations have advanced university educations in the fields of business, accounting, chemistry, engineering and law – better equipping them for the complex world of transnational crime. Criminal enterprises such as cartels maintain their own information technology branches to better use new and emerging technologies from smartphones to PGP-encrypted BlackBerry devices.

Project OSPA
One tangible example of the way in which transnational OC operates is Project OSPA. This operation began in April 2008, when Australian Customs received information from the Canada Border Services Agency (CBSA) that a suspicious shipment of beauty supplies was en route to Australia from Canada. CBSA intelligence indicated that a shipment of massage chairs might have drugs concealed inside them.

In May, the container arrived at Port Botany in Sydney, Australia. An examination revealed the chairs had false bottoms, under which a white powder was hidden. The powder was identified as cocaine, and the Australian Customs investigation was handed over to the Australian Federal Police. The police arrested those responsible for receiving the shipment.

Organized crime groups not only produce synthetic drugs for domestic markets, but also provide significant quantities for international markets such as the United States Australia and beyond. Project OSPA clearly showed that criminal elements not even present in Canada, but rather in a third country, controlled the operation. This project resulted in the seizure of approximately $110 million worth of illicit drug products shipped from Canada, which has now moved from being a principal end-user for OC to a significant source country.

Combatting transnational OC
There are a number of steps that can be taken to enhance the efforts to combat transnational OC.

One of the key areas to invest in is the enhancement of intelligence and information exchange amongst partners. Second is the need to improve and continuously change our policing approach to disrupt transnational OC.

Lastly, there needs to be a concrete effort to re-direct intelligence and focus on long-term, strategic and aggressive intelligence operations.

Ultimately it’s in everyone’s best interest to leverage all possible areas of co-operation including legal instruments, expertise and information-sharing.

This article was previously published in the RCMP Gazette (Volume 75 No.1, 2013 edition page 22). Used with permission.

Rick Perry was the Superintendent in Charge of the RCMP Greater Toronto Drug Section between 2009 and 2013. He can be reached at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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