Out of Sight, Out of Mind: Barclay’s Bank Kiboshes Somali Remittances

Originally Published by the Global Initiative Against Transnational Organized Crime, Available Here.

In May, Barclays Bank announced it would be withdrawing banking services from 250 money transfer services, including a number that provided remittance services to Somalia and Somaliland. This was the last western bank serving Somalia.  Barclay’s rational for the service termination revolved around the weak internal controls against money laundering and terrorist finance many of the businesses reportedly had.

In reality, it is more likely that it was a fear of risk that motivated Barclays to act. Over the last decade, anti-money laundering regulations have become increasingly strict. In recent years, financial regulators have moved aggressively against banks handling “dirty money”, often levying massive fines for non-compliance. The $1.9 billion settlement HSBC reached with the U.S. this August, has prompted an increasingly risk averse banking community to minimize their exposure to businesses deemed to be potential money laundering and terrorist finance threats.

Anti-money laundering (AML) efforts are a tricky balancing act for banks. At a base level, AML efforts necessitate that exercise due diligence in providing banking services and implement “know your customer” (KYC) rules.  The challenge for many remittance services is that many users, and especially recipients, do not possess the official identification necessary to meet KYC requirements. Being unable to guarantee that those who engage in remittance activities via their banking partners are not laundering money or funding terrorists, banks have opted for the extreme option and excised them from their banking systems.  A report by Thompson Reuters issued this month offers a pragmatic, risk-based approach to KYC requirements.

In taking this decision, Barclay’s may have mitigated the risk that it faces, but its actions will have significant consequences for the economy, development and thus stability of Somalia, whose future is again looking more fragile.  This stems of the importance of remittances for senders and receivers, as well as the size of the economic flows. Somalia alone receives $1.2 billion in remittances annually. Many Somali families depend on remittance to supplement their incomes.  Furthermore, this decision is in fact only minimally effective, or possibly even counter-productive, in the broader battle against money laundering and organized crime. Given the importance of the remittance flows, there is little chance that the Somali diaspora will cease sending money simply because the legal channels are withering away.  Instead they will turn to informal, often untraceable money remittance systems – such as hawalas – to support their families in Somalia.

The shift from formal, traceable systems – despite their flaws – to untraceable channels hinder the efforts of FIUs and law enforcement agencies to identify and trace actual terrorist and criminal finance. It may even provide a benefit to criminal actors, as the new channels for otherwise licit remittance funds pulsing through the informal challenges will overwhelm and camouflage the far smaller number of illicit transactions. Thus, Barclay’s decision has produced few winners – not the migrants, the remittance receivers, nor law enforcement agencies. In an ironic twist, the only beneficiaries appear to be Barclay’s itself and the international criminals and terrorists that it ostensibly acted to impede.

Book Review: Africa and the War on Drugs

Originally Published by African Arguments

It is devilishly difficult to accurately track and describe the international trade in narcotics. Trafficking routes emerge with startling rapidity, states alternately demonize and then decriminalize different drugs, while fickle consumers spur the development of markets for new types of narcotics overnight. The illicit organizations conducting the trade have every reason to camouflage their activities, leading statistics on production, usage, and trafficking patterns to be outdated or inaccurate.

Nonetheless, the narcotics trade is a vital subject for policymakers and researchers to grapple with. The markets for the most popular narcotics – cannabis, cocaine, amphetamines, and heroin – dwarf markets for licit drugs, such as cigarettes, coffee, and tea. Only the market for alcohol outstrips that for illicit drugs. However, unlike alcohol, the market for narcotics is illegal, in whole or in part, in all countries. Often violent organized crime groups dominate the trade; their operations have been linked to violence, corruption, and the misery of addiction.

Over the last decade, concerns as to the impact of narcotics on African nations have mounted. From crime-riddled slums in South Africa to narcotics assisted insurgency in Mali, governments, NGOs and international organizations have loudly proclaimed the deleterious impact of narcotics production, trafficking and consumption on African states and their citizens. However, the discussion of drugs in Africa has been remarkably un-nuanced. Few have attempted to chart the history of narcotics in Africa, or to pick apart the complicated relationship many African states and societies have with drugs. In Africa and the War on Drugs, Neil Carrier and Gernot Klantschnig attempt such an analysis.

An Atypical Look at a Complex Issue

Africa and the War on Drugs is a compact study that nonetheless digs deep into the minutia of narcotics production, consumption, and trafficking throughout the continent. The authors highlight the longstanding use of licit and illicit mind altering substances in Africa. Coffee, khat, and cannabis have been grown, traded and used throughout Sub-Saharan Africa for hundreds of years. The substances were used in different times and places for ritual, recreational, and medicinal purposes.

The advent of the colonial period led to the introduction of new substances, including alcohol, opiates, and tobacco. The colonial period also led to the introduction of legal curbs on substance use throughout the continent, an effort that had little impact on consumer demand for the sanctioned commodities. The criminalization of narcotics progressed during the independence era, even while new types of narcotics gained popularity. Amphetamines came to dominate the drug market in South Africa, while heroin and cocaine markets developed in East and West Africa respectively.

In Africa and the War on Drugs, Carrier and Klantschnig offer an explicit critique of orthodox thinking on narcotics, and especially the prohibitionist approaches favoured by the United States and other international actors. This approach allows the authors to explore the impact of narcotics in Africa from some rather atypical angles.  Acknowledging the history of drug production and consumption in Africa, the authors explore the development benefits that narcotics can yield. Focusing on cannabis and khat, the authors highlight the economic importance of drug cultivation for the rural poor. Africa’s role as a hub for narcotics trafficking, an entrepí´t as the authors term it, is also explored. Carrier and Klantschnig argue that the trafficking of narcotics through Africa is not new, as some have suggested, but rather the continuation of an age-old trade. They describe the khat, cannabis, and kola (a caffeinated nut) trade, indicating how traders have linked producing and consuming areas throughout the continent for hundreds of years. Even heroin and cocaine, drugs commonly assumed to have largely avoided Africa until recently, have in fact been traded and consumed on the continent for decades. Shockingly, they note, “in 1989, 40 percent of patients entered southern Nigerian drug treatment facilities for heroin use and 14 percent for cocaine use.”[1] The use of these hard drugs was initially driven by youth who had experimented with them while abroad. However, the authors note that in Nigeria, heroin has rapidly gained in popularity amongst low income populations.

Carrier and Klantschnig also highlight that the socio-cultural context of drug consumption in Africa differs dramatically from what is typically found in Western nations. An example highlighted by the authors is the functional use of marijuana in Africa, where, in some cases, consumption of the drug “enables [users to] work harder at physically demanding jobs.”[2] The ritualistic uses of khat and marijuana are also highlighted.

In discussing the use of traditional “hard drugs” “” cocaine, heroin, and methamphetamine “” in Africa, the authors reveal the existence of destructive addictions in Africa. The authors explore the impact of hard drugs on South Africa, where epidemics of crack, tik, and mandrax have devastated many urban areas. Desire and desperation for the drugs have fuelled the growth of urban gangs and compelled some addicts to engage in the highly risky commercial sex trade. The authors paint a vivid, disturbing picture: while South Africa is treated as unique, it may well offer a window into the sort of destructive drug culture that may emerge in Africa in the coming decades.

Finally, Africa and the War on Drugs argues that for Africa, concerns about drug related violence are misplaced. The authors view the lack of retail markets for cocaine and heroin, as well as the small-scale nature of the drug groups as inhibiting the emergence of widespread narco-violence. They go on to highlight the different strategies which African states have employed in responding to narcotics: complicity, neglect and repression. Each of these approaches is investigated through the lens of a state; each strategy is found to be wanting. Throughout the book, the authors evince the point that “the war on drugs in Africa is at its heart an initiative driven by Western interests.”[3]

In Africa and the War on Drugs, Carrier and Klantschnig offer up a trove of information on drug issues in Africa.  They succeed in challenging the “stereotypical portrayal of substance use in Africa.”[4] By flipping the argument, asking whether “drugs can help development” or whether illicit narcotics are more harmful or common than licit ones, the authors offer a new way of thinking about drugs on the continent.

Gaps and Guesses

However, Africa and the War on Drugs also suffers from its authors’ attempt to go against conventional wisdom. Their focus on the failings of prohibition leads them to minimize the negative impacts that narcotics have in Africa. The authors argue that Africa’s demand for drugs is minimal, and the impact addicts have on society is over blown. They dismiss the proposition that “drugs are a source of widespread harm for African youth, or that their problematic consumption is the cause of social harm.”[5]

Unfortunately, this hopefulness is out of sync with reality. Across Africa there are hints that drug consumption trends are changing. The routing of cocaine through West Africa to Europe has sparked a nascent crack epidemic. From Guinea to Ghana, addicts have taken to the drug over the last five years – in Guinea-Bissau one expert estimated that 20-30% of the youth are active users [6]. The rapid increase in crack use is driven in part by its low cost, ranging from 70 cents a hit in Bissau to $2.00 in Accra.[7] In Nigeria amphetamine production laboratories have been uncovered, potentially signalling the emergence of a destructive new epidemic. Oddly, while Carrier and Klantschnig vividly describe the horror of South Africa’s amphetamine epidemic, they seem to treat it as a unique situation. Sadly, the Nigerian labs lay bare the wistfulness implicit in the authors’ reasoning.

A shift in consumption trends is unsurprising, and in many ways unavoidable. The dynamic economic growth has led, in the words of the World Bank, to the “fastest growing middle class in the world.”[8] The emergence of a dynamic middle class in Africa promises to make the continent a prime market for a host of goods – it is nearly unavoidable that globally popular narcotics, such as cocaine, meth, and heroin, will be amongst them.

Carrier and Klantschnig are correct about the general peacefulness of drug production and trafficking in Africa. However, today’s peace and security may be transitory. An increase in drug use coupled with increasing incomes promises to make Africa’s drug market lucrative. It is highly likely that gangs, similar to those described by the authors in South Africa, will emerge and seek to control drug retail markets throughout the rest of the continent. The situations in South Africa and along cocaine transit routes in the Western Hemisphere are instructive. In both, high levels of criminal violence have accompanied the maturation of retail drug markets. In some countries in the Western Hemisphere, drug related violence has surpassed levels previously seen during civil wars. There is no reason to think African countries are immune from such violence. Speaking of crack addicts in Guinea-Bissau, one government health worker noted, “No police approach them. They can’t because of the condition of these people “” they are becoming dangerous.”[9]

Africa and the War on Drugs is also remiss in its analysis of the danger drug trafficking poses to African countries. Drug trafficking and drug consumption are on the rise in countries spectacularly under-equipped to deal with them. As the authors indicate, few public health services are available for addicts. Public security services are often either underfunded or co-opted in their fight against narcotics. An increase in drug consumption will strain the ability of governments to effectively respond, increase opportunities for corruption, and likely degrade already stretched public health infrastructure.

Carrier and Klantschnig should be congratulated for Africa and the War on Drugs. They have dug deeply into an opaque subject, and produced a valuable study. The onus is now on other researchers to follow them, challenging conventional thinking on drugs in Africa, and uncovering valuable new information on this dynamic and dangerous trade.

Nonetheless, their book leaves some key questions unaddressed. First, will drug gangs turn Africa into a production point for hard drugs? The authors highlight early 20th century attempts to cultivate both coca and poppies in Africa, while amphetamines are already being produced throughout the continent “” will production efforts increase and diversify? Second, what types of groups will emerge to handle retail drug sales? Will they take the form of South Africa’s urban gangs, or the violent, transnational Maras of Central America? Finally, how will African states adapt to the new drug realities? Will they become co-opted and semi-criminalized, as in Guinea-Bissau, approach the issue with benign neglect, as in Lesotho, or ferociously repress the trade, as in Nigeria?

[1] Neil Carrier and Gernot Klantschnig, Africa and the War on Drugs, Zed Books, London, 2012 pp. 43

[2] Carrier and Klantschnig, pp. 36

[3] Carrier and Klantschnig, pp. 2

[4] Carrier and Klantschnig, pp. 16

[5] Carrier and Klantschnig, pp. 131

[6] Jessica Hatcher, Guinea-Bissau: How Cocaine Transformed a Tiny African Nation, Time Magazine, Posted October 15th, 2012, Accessible at http://world.time.com/2012/10/15/guinea-bissau-how-cocaine-transformed-a-tiny-african-nation/#ixzz2PJov3XSb, Accessed April 2nd, 2013; Travis Lupick, Drug traffic fuels addiction in Sierra Leone, Al Jazeera, Posted January 26th, 2013, Accessible at: http://www.aljazeera.com/indepth/features/2013/01/2013121105523716213.html, Accessed April 2nd, 2013; Masahudu Ankiilu Kunateh, Cocaine usage fast spreading in Ghana, GhanaDot.com, Accessible at http://www.ghanadot.com/social_scene.kunateh.032209a.html, Accessed at April 2nd, 2013

[7] Hatcher, 2012; Lupick, 2013; Kunateh.

[8] Wolfgang Fengler, The East African ride to Middle Income, World Bank Blog: African can… End Poverty, Posted February 21st, 2012, Accessible at http://blogs.worldbank.org/africacan/the-east-african-ride-to-middle-income, Accessed April 2nd, 2013

[9] Hatcher, 2012

How m-banking can reduce laundering

Originally Published in Africa Business Daily

The last decade has seen telecommunications companies and banks offer secure, affordable, and simple mobile banking (m-banking).

Internationally, customers have enthusiastically adopted the technology, in many cases enjoying access to financial services for the first time. The various m-banking services, coupled with the ingenuity and energy of newly enfranchised users, have assisted individuals and nations in advancing themselves economically.

Kenya is a prominent example of this success, with six million M-Pesa — the money transfer service offered by Safaricom — accounts activated in the last two years. M-Pesa’s rapid growth will likely continue, with customers choosing its security and accessibility.

Governments, however, have had more difficulty in adapting to the new technology than their constituents. Governments have generally appreciated the economic benefits enabled by mobile banking, and, in some cases, have pushed for adoption.

However, governments have reacted with much less surety in adapting to the perceived security and users safety threats posed by that same technology. High on the list of concerns is the potential for m-banking systems to be exploited by money launderers and other criminals.

Such concern is not without merit. Criminal groups are often at the forefront of technology adoption and exploitation. It would be surprising if some criminals did not attempt to exploit the benefits offered by m-banking systems.

However, in assessing the threat, it is important to focus on the opportunities that m-banking systems offer to government agencies in the anti-money laundering struggle.

In tackling money laundering, officials generally seek to identify persons of concern and to discern patterns in their transactions. Both goals are predicated on the collection and storage of information. M-banking systems, including M-Pesa, already use extensive safeguards to identify users of their network.

In order to send funds, M-Pesa requires the physical device, a PIN, and official identification. The receiver must present at least an SMS confirming receipt and official identification when collecting funds.

It is possible to store and later analyse such information. Thus, records exist, which can be used by the government to identify and track the financial activity of all users.

This can, if properly used, greatly assist law enforcement and regulatory agencies in identifying and tracking nefarious users.

The opportunities M-Pesa, and other m-banking systems, present for information gathering contrast with that of informal value transfer systems, now likely to be replaced. Informal value transfer systems consist of hawala type transferal services, as well as the use of bus drivers to deliver funds to a given town.

While the exact mechanics of these systems differ, their commonality is the informal, trust based nature of the transaction, and the difficulty governments have in gaining information on their operations. Such transfer systems have proved ideal for criminal groups.

Compared to informal value transfer systems, m-banking provides exponentially more information to detect, trace and to deter the operations of criminal and terrorist organisations.

The government of Kenya should embrace mobile banking as an anti-money laundering opportunity, rather than as a money laundering threat.

The security of M-Pesa-like systems, its accessibility and its low costs are likely to draw increasing numbers of subscribers, allowing for better information collection, analysis, and law enforcement.

At the least, the shift of customers from informal value transfer systems into the formal financial sector will lessen the number of informal customers and transactions.

This in turn will allow governments to focus their resources on identifying individuals interested in informal systems only for their secretive nature. In this way, the increase in m-banking popularity may serve to doubly enable government efforts against criminals and money launderers.

Regulatory hurdles will continue, and will provoke intense and meaningful debate. Law enforcement agencies will have to adapt, and create mechanisms to monitor the increasing m-banking traffic for potential signs of criminal acts.

However, it is important to remember that m-banking is a net boon for government anti-money laundering efforts.

The challenge of mobile banking for governments is to design regulatory systems that allow for criminal detection, without squelching attributes that have allowed it to thrive.

Gangs and Smuggling in Liberia

Introduction

Since the end of the civil war in 2003 high-intensity violence in Liberia has been replaced by low intensity, yet pervasive, gang violence. Reporting indicates organized, or semi-organized, groups routinely engage in home invasions, assaults and rape. Criminal gangs may also be involved in cross-border smuggling operations, narcotics production and/or trafficking, and in illicit mineral extraction. The gangs are believed to be composed primarily of unemployed males in their teens and twenties, including many ex-combatants. The majority of the gangs are reportedly located in and around Monrovia. While the citizens of Monrovia seem face the brunt of the increased violence, some information indicates urban gangs may have an interest in extending their activities more generally throughout the country. In at least one case a gang from Monrovia is known to have driven to Bong County in order to raid local homes and businesses.

Much of the current gang violence is rooted in Liberia’s high levels of unemployment and poverty. Despite five years of strong economic growth at least 85% of potential workers are unemployed and 60% live below the poverty line. While the Demobilization, Disarmament, Rehabilitation and Reintegration (DDRR) process in Liberia was generally successful, it is believed a large number of ex-combatants are amongst the unemployed or underemployed. These ex- fighters, networked together through former commanders and other social ties, likely play a role in the ongoing criminal violence. An estimated 40% of the Liberian population is under the age of 14, a potential harbinger of increased social pressures and crime in the years to come.

Smuggling is another key variable that has facilitated the widespread emergence of criminal organizations in Liberia. Criminal groups take advantage of state weakness to produce and move various products both within Liberia and into neighboring nations. While not all smuggling activities are perpetrated by criminal gangs, it is likely that the activities have facilitated gang growth and formation. Narcotics, in particular marijuana, are likely the most frequently trafficked illicit product within Liberia, and is believed to have contributed to the current crime wave.

Though the Government of Liberia has taken steps to address increases in violent crime and smuggling, it unclear if these efforts are sufficient. Criminal gangs in Liberia appear to be growing more violent, more audacious and more active despite an increasingly capable security sector. If the government efforts to combat criminal gangs fail it risks increasing instability, a reversal of economic growth and the legitimacy of the current democratic system. Understanding the structure of criminal gangs in Liberia

Criminal Gangs

Criminal gangs and organized crime in Liberia appears to be composed largely of loosely organized youth connected through ethnic, familial, or conflict era ties. The majority of gang members are believed to be Liberian, though some information indicates the involvement foreign individuals.[1] Gangs are most prevalent in urban areas, though reporting indicates their presence in some rural and remote areas. The opaque and transitory nature of many of the gangs makes reliable intelligence gathering and specific identification problematic.

The primary motivation for criminal gang activity is economic, with quick, violent attacks seemingly favored over long-term enterprises. In urban areas gang activity primarily involves armed robbery and narcotics distribution. In more rural areas groups of ex-combatants are known to engage in illegal gold mining and extortion. Rural gangs may also act as narcotics producers; supplying and/or smuggling marijuana to the urban gangs. The cross-border links of former combatants may also influence gang operations, however it is unclear to what degree Liberian gangs are involved with gangs or trafficking groups from neighboring states.

Identified Gangs

Few gangs in Liberia are specifically identified in media accounts. The groups listed below are the exception to the rule. Generally they are known either for widespread operations, for their brutality or unconventional tactics.

• Asakaba (AKA Issakaba) – The Asakaba Gang was first reported in Monrovia in 2006, though some information indicates the gang may have been formed in 2003. In 2006 the gang was reportedly composed of three units: Yahvos, “No Good Advice” and the “Death Group.” One gang leader claimed in 2006 that Asakaba had branches throughout Liberia. At least one attack linked to Asakaba has been reported in Buchanan. While most reports of Asakaba seem to refer to a cohesive group, some information indicates the term “Asakaba” is now used generally to refer to violent youth gangs in Monrovia.
• The 11 Brothers Gang – The 11 Brothers Gang is reportedly based in Harbel, Margibi County. First reported in 2007, the gang has tried to extort money from municipal authorities in Grand Gedeh and Nimba counties. Some information indicates a gang sub-component may be named “The Neck Babers.”
• Future 57 Gang – Operating in Sinkor, outside of Monrovia, the gang was last reported active in 2006.
• Organized Criminal Nigerian Group (OCNG) – A gang of Nigerians identified in Monrovia. The gang is believed to concentrate on narcotics and counterfeit currency smuggling. While the OCNG is the only identified non-Liberian gang operating in Monrovia, it is highly likely other transnational gangs have a presence or maintain contact in Liberia.

Structure

The typical operational structure of Liberian gangs is unclear, though it likely influenced both by traditional West African criminal networks and through command structures developed by militant groups during the civil war era. Traditional West African criminal groups tend to be loosely structured, non-permanent entities. These groups assemble for specific operations or projects and then disappear. Often they are centered on family groups or close friends. Reporting indicates Liberian gangs have a generally amorphous nature, with few structured organizations identified to date. It is possible this shadowy nature is a byproduct the West African gang model, with groups generally formed for specific operations or robberies rarely staying together as cohesive units. Information does seem to indicate that some gang organization is occurring along clan lines.

The structure of Liberian gangs is likely also influenced by the hierarchic organization of rebel and government forces from the civil war period. In many cases it is believed the structure and command hierarchy of the civil war era combatant organizations are still functioning. It is likely the continuing existence of hierarchic networks amongst ex-combatants allow for criminal groups to draw together necessary personnel for specific operations with relative ease. In several cases identified rebel commanders have commanded armed groups during robberies and assaults. It should be noted that the reported involvement of rebel commanders in criminal activities seems to be an exception to the norm, with little information indicating that former militant groups are exercising control over either the rural or urban gangs.

Based on reporting it seems likely that criminal gangs in Liberia are only moderately organized. Gang leaders may be former commanders from the civil war era or be organizers, drawing together like-minded persons for specific robberies or other criminal activities. It is unlikely gang leaders exert strict command and control over their members, increasingly the likelihood that individual or small groups of gang members could stage operations independent of the larger group.           

Method of Operations

Criminal gangs in Liberia tend to be well armed and violent. Weapons of choice include cutlasses, single barrel shotguns and AK-47 assault riffles. Gangs to not appear to hesitate to employ violence, with many robberies also involving assaults, including rape. Though rare, some firefights between gangs and Liberian Law Enforcement or Military agencies have been reported.

Specific methods of operation depend on both on the gang and on the operation they are engaged in. Much of the violent crime occurs at night, often in the early morning hours. The lack of streetlights and electricity in Monrovia likely assists the movement of gangs during these hours. Home invasions tend to occur in groups, with the same gang storming several houses or businesses in a given geographic area. In some cases gangs reportedly create roadblocks are erected to block law enforcement from accessing a certain areas to further impede law enforcement personnel access. Medium to large groups (3-15 suspects) of attackers have been reported, with most home invasions seeming to involve less than eight people. In at least one case a rubber plantation was assaulted by at least 30 individuals, who made off with over US$9,000 in rubber.

While most gang attacks are believed to be economically motivated, in a minority of incidents there may have been some sort of political motive. In these attacks political statements have included: “As long as Ellen is President, we will not stop these terrorist acts” and “We are not here to joke because oldma has made the country so hard for us to live. Ellen will suffer in our hands.” In other cases attacks have appeared to involve some terrorist intent, with one group demanding either money or human heads. No information indicates political parties are utilizing criminal gangs in Liberia, though suspected links between gangs and ex-combatant commanders could raise this risk in the future.

Smuggling operations tend to be smaller in nature, with most reports mentioning only 2-3 personnel. It’s highly likely a greater number of personnel are involved in the smuggling network, whether in command, production or facilitation roles. The majority of smuggling involves the transportation of the product via motorcycle or motor vehicle.

Smuggling in Liberia

A symptom of weak state control smuggling is a pervasive activity in much of Liberia. While it is unclear to what degree criminal gangs are involved in smuggling, it is likely they actively engage in and profit off of it. Some reporting seems to indicate smuggling routes and networks formed during the civil war era are still active, especially for cross border smuggling. Products smuggled into and within Liberia include narcotics, machinery, and weapons. Products smuggled out of Liberia include narcotics, minerals, and food.

While smuggling occurs throughout Liberia, key smuggling areas appear to be located along the nation’s border with Guinea (Conakry). The cities of Gbarnga, in Bong and Ganta, in Nimba County, have been identified as smuggling hubs. Limited government personnel and resources have facilitated the emergence of a thriving cross border trade in food, petrol, liqueur, gold, weapons and motorcycles. From these hubs goods are either moved directly through the border crossings in the towns, or are sent through more remote, and less manned, border crossings. The Guinean state of Nzerekore, across from Bong and Nimba, has been described as “West Africa’s most unstable region” and a prominent area for arms trafficking within the wider Mano river basin. Guinean nationals are known to be active in smuggling operations within Liberia. Some trafficking is also believed to occur along Liberia’s border with Sierra Leon and Cote D’Ivoire, though the extent and type of trade in unclear.

Narcotics

Narcotics are one of the most frequently trafficked products within Liberia. The vast majority of identified cases of narcotics trafficking involve domestically grown marijuana, noted by the Liberian Drug Enforcement Agency (LDEA) to be the nation’s drug of choice. During the civil war combatants on all sides were encouraged to use marijuana. Many ex-combatants continue to use the drug, creating a robust domestic market for marijuana. There is concern that drug abuse has spurred violent crime in some areas of Liberia.

The majority of marijuana consumed in Liberia is produced domestically. Bong and Nimba counties have been identified by the LDEA as centers of marijuana production in Liberia. LDEA and the United Nations Mission in Liberia (UNMIL) personnel in the area have uncovered both large and small growing operations, with one operation netting over 400,000 cannabis plants. The identity of marijuana producers in the area is unclear, though the larger operations are likely linked to or part of established gangs. According to UN reporting Bong and Nimba counties were, along with the greater Monrovia area, key areas for ex-combatant resettlement. It is unclear whether civil war era links connect narcotic producers in this region with criminal gangs in Monrovia.

From Nimba and Bong counties marijuana is usually transported to Monrovia. Generally private citizens on motorcycles or in motor vehicles are the primary transporters. In at least one case marijuana was seized next to an airfield, though it is unclear if aircraft are being utilized in narcotics movement. In several incidents official personnel were arrested for narcotics trafficking. These personnel included presidential guards, a deactivated special security service personnel, and a private in the armed forces of Liberia. It is unclear whether these incidents are aberrations, or whether they represent an emerging collusion between some members of the security services and trafficking organizations.

Some reporting has indicated Liberian marijuana is exported to neighboring countries, however, there is little information to confirm or deny this. The highly porous nature of the Guinea-Liberia border in Bong and Nimba counties could facilitate this traffic, though no reports of outbound interdictions have been uncovered. In at least one case a Sierra Leonean soldier was arrested for attempting to smuggle marijuana into Liberia, potentially indicating the Liberian demand for narcotics is more robust than that in neighboring areas.

West Africa has been increasingly utilized by Latin American drug trafficking organizations as a transshipment point for cocaine headed to Europe. Cocaine trafficking organizations are known to be active in Guinea-Bissau, Guinea (Conakry) and Sierra Leon. The LDEA has indicated Liberia has been a transshipment point for narcotics headed from the Americas to Europe for almost two decades. Despite these claims, little information indicates trafficking organizations heavily utilize Liberian territory to store or ship narcotics. No large narcotic shipments have been uncovered within Liberia, nor at border crossing points. Only 16 kilograms of cocaine were uncovered between 2006 and 2008 on passengers flying from Liberia into Europe. This compares to 141 kilograms uncovered on flights originating in Sierra Leon and 345 kilograms on flights from Guinea (Conakry) into Europe. It is unclear why Liberia has not been targeted by Latin American DTOs, though it may be due to the presence of UNMIL.

While Liberia does not appear to be a major transshipment point for cocaine several caches of the narcotic have been uncovered. However these caches, typically involving less than two kilograms, are likely geared toward the domestic drug market. Nigerian organized crime groups seem to be the predominant traffickers of cocaine and heroine into Liberia.

While Liberia has not been utilized to date by Latin American DTOs it may be at risk. Weak state capacity, a long coastline and physical proximity to Guinea (Conakry), a key narcotics transportation point, all raise the risk that Liberia will increasingly be targeted by trafficking networks. The large, young and experienced fighter base in Liberia could well supply localized enforcement capacity. Ignition of civil wars, coups or other civil unrest could in the future be prompted by LADTOs in order to counter the emergence of effective government is a real possibility.

Minerals

Liberia has extensive deposits of both gold and diamonds. At present the majority of mineral extraction in Liberia is artisanal, often conducted by ex-combatants in remote areas. In some cases command structures from the civil war are maintained in mining regions. River Gee province is reportedly a center of illicit gold mining, while Gbapolu County is known for illicit diamond mining. The majority of gold and diamond mining in Liberia is unregulated by the government.

Gold and diamond smuggling is reportedly rampant along the Guinea-Liberia border. It is widely believed in Liberia that the price paid for gold is higher in Guinea than Liberia, an ongoing spur for cross border smuggling. Reportedly, the town of Ganta in Nimba County is a center of gold smuggling activities.

It is unclear to what degree criminal gangs are involved in the illicit minerals sector, though reports have emerged of gangs extorting or assaulting illicit miners. In the past rebel groups have sought control of artisanal mining areas in order to fund their insurgencies.  While there is no information indicating anti-government groups are seeking control over the mining sector, the inability of the government to regulate the industry heightens the risk that natural resources could fuel internal instability.

Food

Food, primarily rice, is frequently smuggled from Liberia into Guinea. Ganta has been identified as the key smuggling center for this trade. Palm oil is also a frequently smuggled commodity. Rising regional food prices appear to have exacerbated smuggling attempts, as well as increasing Liberian anger against food smugglers. In one case a warehouse in Ganta was attacked by a mob that believed the owner was planning on smuggling rice in Guinea. While food prices have stabilized somewhat, they continue to be elevated compared to their long-term norm, increasing the likelihood that food will continue to be smuggled in the region.

Counterfeiting

Large amounts of counterfeit Liberian and U.S. currency have been recovered in Liberia. In one case U.S.$2.5 million was seized in central Liberia. Some reporting may indicate that in general Liberian counterfeit currency is manufactures in the nature, while counterfeit US currency is manufactured abroad and smuggled into Liberia.

It is unclear which groups are engaged in counterfeit currency manufacturing and distribution in Liberia. However, the large amounts of counterfeit currency recovered to date seem to indicate that well funded criminal organizations may be involved.

Analysis

Overall criminal gangs and their smuggling operation present a low to medium threat to the security of Liberia. The operations of the gangs are symptomatic of weak state capacity, though they do not in and of themselves threaten the state. They mainly pose a threat in several ways. Continued violent crime could potentially undermine support for the government amongst the population. This is likely to happen first in Monrovia. The reported increase in vigilante killings and “neighborhood watch” groups could be indicative of civilian loss of confidence in the government’s ability to protect them. Violent crime, especially crime targeting business or industrial locations, could deter foreign investment in Liberia and retard economic growth. This could result in increasing unemployment, and thus lead to more gang recruitment. Continued gang activity, including narcotics smuggling could lead foreign drug trafficking organizations to partner with the gangs. This in turn could create increased operational and financial capability amongst the gangs. If not checked this sort of partnership could reverse the progress Liberia has made in the last five years, setting it on the path towards state failure. Finally, continued gang activity could create a pool of explicitly anti-government ex-fighters, who could in turn seek to politically destabilize the country. While no information indicates gangs have a political agenda now, there are likely linkages between former rebel commanders and current gang members. Politicians, or others, who wish to either topple the government or seize control of some areas of the nation, could exploit these linkages.

There is no easy fix to the issue of gangs and smuggling in Liberia. Security capacity needs to be increased, including an expansion of the Liberian National Police and its deployment into traditionally underserved urban and rural areas. As well policies encouraging rapid economic growth are important. Unemployment and poverty are powerful motivators for gang membership. As Liberia’s economy rebounds from the civil war, it is likely the attraction of former fighters to criminal gangs will wane. Finally, increased intelligence should be gathered on the structure and connections of criminal gangs. Key questions include:

• What are the connections between urban and rural gangs?
• Are Monrovian gangs successfully spreading to other areas of the nation?
• To what degree are former rebel commanders in control of, or “shot callers” for, gangs?
• What transnational ties to Liberian gangs hold?
• Does any information indicate Liberian gangs have been approached by or made contact with Latin American Drug Trafficking Organizations?

Addressing gang crime in Liberia is a serious challenge to the state, yet one which needs to be successfully met. If the Liberian government fails to halt the current increase in crime, it is unclear whether it will be able to succeed in rebuilding the nation. Donor nations and international organizations should make every effort to assist the government in succeeding.

[1] French speaking criminal groups have been reported in Monrovia, while Nigerian and Sierra Leonean suspects are also believed to be active.