Who opens the doors to mega-loads of cocaine?

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By Ro­drigo Ibar­rola

It is no se­cret that for­mer Min­is­ter of the In­te­rior and the Na­tional Anti-Drug Sec­re­tariat (SENAD), Ar­naldo Giuzzio, and for­mer Pres­i­dent Ho­ra­cio Cartes are en­e­mies. The first one dis­closed the al­leged mech­a­nism used for the laun­der­ing of money from to­bacco com­pa­nies. Mean­while, Cartes’ ref­er­ents re­sponded by ex­pos­ing the al­leged link be­tween Giuzzio and the drug traf­ficker Mar­cos Vini­cius Es­pínola Mar­ques de Padua (part­ner of a Taba­calera del Este share­holder), who helped the for­mer min­is­ter by rent­ing him a van dur­ing his stay in Brazil on va­ca­tion.

An­other of the facts at­trib­uted to Giuzzio by the Car­tismo is that, dur­ing his time as SENAD min­is­ter, he dis­man­tled the Di­rec­torate of Air, River and Land In­tel­li­gence (DI­AFT), which, ac­cord­ing to this sec­tor, was in charge of pre­vent­ing the pas­sage of drugs through the Paraguay-Parana wa­ter­way. As a re­sult, Mario Abdo al­lowed for a “fast lane” for the pas­sage of ship­ments and the proof would be the in­crease in seizures in Eu­rope of cargo from Paraguay.

How­ever, a closer look at SENAD’s man­age­ment re­veals that this as­ser­tion has lit­tle ba­sis in fact. Al­though it is true that the DIAF has been dis­man­tled, the num­ber of op­er­a­tions has not de­creased, but rather in­creased, as has the vol­ume of co­caine loads seized, as can be seen from the data in Fig­ure 1 re­gard­ing the num­ber of op­er­a­tions car­ried out and the amount of co­caine seized. It should be noted that the num­ber of raids is an in­ter­na­tional stan­dard for es­ti­mat­ing the amount of co­caine cir­cu­lat­ing in the mar­ket.

Fig­ure 1. Monthly av­er­age of pro­ce­dures car­ried out and co­caine seized

Source: Own, with data pro­vided by SENAD.

Parallel criminal financial networks assist cocaine traffickers not only in money laundering activities, but also in the placement of large amounts of money in source countries and distribution centers to acquire cocaine shipments.

One might think that the phe­nom­e­non of seizures of Paraguayan cargo in Eu­ro­pean ports is a phe­nom­e­non caused by ac­tions taken by the gov­ern­ment. How­ever, this ob­ser­va­tion fails to con­sider a great deal of con­text. For ex­am­ple, Paraguay was not the only port of ori­gin of the cargo seizures, nor was it the one with the high­est vol­umes. One need only re­view Eu­ropol’s fig­ures on the ori­gin of the mega cargo seizures. Fig­ure 2 shows the main ports of ori­gin of co­caine traf­fick­ing to Bel­gian ports be­tween 2018 and 2021. It shows that Paraguay is num­ber 10 and Guayaquil (Ecuador) is by far the most im­por­tant port of de­par­ture of co­caine to Bel­gium.

 

Fig­ure 2. Top 10 ports of ori­gin by quan­tity of co­caine des­tined for Bel­gian ports seized in 2018-2021, in tons

Source: Own, with Eu­ropol data.

Fig­ure 3 shows the amount of co­caine seized in other Eu­ro­pean ports by ori­gin. Here we see that Guayaquil and San­tos con­tinue to be the main ports of ori­gin, with Vil­leta in the next group of ports with­out much dif­fer­ence be­tween them.

Fig­ure 3. Top 10 source ports by quan­tity of co­caine des­tined for other EU ports seized in 2018-2021, in tons

Source: Own, with Eu­ropol data.

As can be seen, Paraguay is nei­ther the only coun­try of ori­gin nor the largest in vol­ume. In fact, it is a mi­nor player in the re­gion com­pared to the oth­ers. Ob­serv­ing the evo­lu­tion over time, seizures in Eu­rope had a sub­stan­tial in­crease start­ing in 2017 (Fig­ure 4). That is, co­in­cid­ing with the end of Cartes’ term in of­fice. Since then, there has been a sus­tained in­crease dur­ing Mario Ab­do’s term. Given this cir­cum­stance, it is at the very least im­pru­dent to point to one per­son as the cul­prit of this sit­u­a­tion. The causes are far from our coun­try and are more com­plex.

Vol­ume of co­caine seized, in tons

Source: Own, with Eu­ropol data.

Since 2017, record amounts of co­caine have been seized in Eu­rope every year, es­pe­cially in sea­ports. In 2020, the largest amount ever recorded, 214.6 tons, was in­ter­cepted. Pre­lim­i­nary ag­gre­gate data shows that the 2021 to­tal was even higher, with seizures of 240 tons hav­ing been re­ported up to the time of the lat­est pub­lished re­port.

It stands to rea­son that seizures are an in­di­ca­tor of in­creas­ing sup­ply, in turn, dri­ven by de­mand. In­deed, data from sewage analy­sis in Eu­ro­pean cities show an 80% in­crease in co­caine use since 2016.

Ag­gre­gate trends of co­caine residues in 8 EU cities 2011 to 2021, mg/​1000 in­hab­i­tants/ per day

Source: Mon­i­tor­ing Cen­ter for Drugs and Ad­dic­tion (EM­CDDA).

Note: Trends in daily av­er­age amounts of ben­zoylec­go­nine in mil­ligrams per 1000 in­hab­i­tants in Antwerp Zuid (Bel­gium), Za­greb (Croa­tia), Paris Seine Cen­tre (France), Mi­lan (Italy), Eind­hoven and Utrecht (The Nether­lands), Castel­lón and San­ti­ago (Spain). These 8 cities were se­lected due to the avail­abil­ity of an­nual data from 2011 to 2021.

But what has dri­ven this ex­plo­sion in co­caine use? One of the fac­tors be­hind this phe­nom­e­non is the re­tail price of the prod­uct, which has been be­com­ing more af­ford­able since 2015. The sub­stan­tial prof­its as­so­ci­ated with co­caine traf­fick­ing have at­tracted nu­mer­ous Eu­ro­pean-based crim­i­nal net­works into the busi­ness. Most of the crim­i­nal net­works have been ac­tive for over 10 years, how­ever, new play­ers seek­ing a larger share of the co­caine mar­ket such as Al­ban­ian, Bel­gian, British, Dutch, French, Irish, Mo­roc­can, Ser­bian, Span­ish and Turk­ish net­works have joined in. Fig­ure 6 shows how the av­er­age price per gram of co­caine in Eu­rope has fallen. Thus, a gram that costs ₲25,000 in Asun­ción (mar­keted in 2-gram bags for ₲50,000), in Eu­rope has an av­er­age value of al­most ₲1,200,000 at the cur­rent ex­change rate. The mar­gin is re­mark­able and, above all, ap­peal­ing.

Av­er­age Af­ford­abil­ity, euro/​gram

This com­pe­ti­tion be­tween groups led to an in­crease in crim­i­nal net­work op­er­a­tions (and thus sup­ply) and a re­duc­tion in the cost of co­caine, dri­ving de­mand. Co­caine con­tin­ues to be pro­duced mainly by Colom­bian net­works. These, in turn, co­op­er­ate with other crim­i­nal net­works in South Amer­ica and the Eu­ro­pean Union, and keep a phys­i­cal pres­ence in tran­sit coun­tries. For ex­am­ple, Brazil­ian crim­i­nal net­works have be­come part­ners with Colom­bian net­works and buy co­caine pro­duced in Bo­livia and Peru. In ad­di­tion to their traf­fick­ing ac­tiv­i­ties, they are ser­vice providers for crim­i­nal gangs that op­er­ate glob­ally and use the ports to traf­fic co­caine. The same is done by Mex­i­can car­tels with large co­caine ship­ments through South Amer­i­can ports to Eu­rope.

This com­plex web of drug traf­fick­ing has re­quired the par­tic­i­pa­tion of pro­fes­sion­als from mul­ti­ple ar­eas such as lawyers, bank em­ploy­ees, ac­coun­tants, money laun­der­ers, com­puter sci­en­tists, chemists, me­chan­ics, in­ves­ti­ga­tors and hit men. Par­al­lel crim­i­nal fi­nan­cial net­works as­sist co­caine traf­fick­ers not only in money laun­der­ing ac­tiv­i­ties, but also in the place­ment of large amounts of money in source coun­tries and dis­tri­b­u­tion cen­ters to ac­quire co­caine ship­ments.

What we con­clude from all this is that it is not true that a sim­ple ad­min­is­tra­tive pro­vi­sion has caused the sig­nif­i­cant in­crease in co­caine traf­fick­ing. The causes are much more com­plex than they ap­pear. Any mod­er­ately rig­or­ous analy­sis should con­sider all as­pects of what is clearly a global phe­nom­e­non.

Cover im­age: Agen­cia IP