Study puts illicit drug trade at $12b a year

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Study puts illicit drug trade at $12b a year

Mark O'Brien and Nick McKenzie

September 27, 2008

Sydney Morning Herald

http://www.smh.com.au/news/national/study-...2217517586.html

 

UP TO $12 billion in illicit drug money is flowing out of Australia annually - an amount 10 to 30 times times greater than official estimates - according to the nation's most powerful and secretive crime-fighting agency.

 

The Australian Crime Commission's estimates suggest authorities are drastically underestimating the quantity of drugs passing over the nation's borders without detection.

 

It is expected that senior law enforcement officials will brief the Federal Government in the coming weeks about the need for revised strategies to confront the huge supply and demand for drugs such as ecstasy in Australia.

 

The Crime Commission chief executive, Alastair Milroy, said the commission believes between $4 billion and $12 billion of drug money is being sent offshore annually.

 

The figure dwarfs estimates provided by Australia's anti-money-laundering agency, AUSTRAC, and the Australian Institute of Criminology.

 

The crime commission's estimates flow from a secretive international operation, codenamed Gordian, which has led to the seizure of drugs worth more than $1.5 billion and the launch of a sophisticated anti-money-laundering strategy.

 

The commission's work has also led to the arrest of more than 70 suspects over drugs and money laundering offences since 2005. Those charged with smuggling money out of the country include international pilots, money remitters and figures connected to Asian organised crime and triad syndicates in Asia, North America and Europe.

 

The commission's estimates suggest a continuing huge demand for ecstasy and other illegal drugs in Australia and that traditional policing is failing to detect most importations.

 

"Certainly we think that current estimates of the size of [drug] money leaving Australia might be conservative," Mr Milroy said.

 

He said Australian policing agencies were involved in some impressive drug seizures but it was difficult to measure their impact. "How do you quantify that impact? Clearly there are still drugs in the street and drugs that are getting through," he said.

 

Associate Professor John Walker, a criminologist who conducted a study on money laundering in 2007 for the Australian Institute of Criminology and AUSTRAC, estimated that $382 million was generated from drug trafficking in 2004. The figure is the most recent official public estimate.

 

Associate Professor Walker said the crime commission's new estimates should ring alarm bells in police agencies and the Federal Government. He said it indicated that many more drug importations were entering Australia than were being detected.

 

"If all police ever do is chase individual importations, they never see the big picture. I think what the ACC is doing, by looking at transnational organised crime as economists would, is a big breakthrough in law enforcement thinking in Australia," he said. "If the ACC is right, then Australia would have the most profitable market for illicit drugs on the planet."

 

The crime commission is using sophisticated systems to track high-risk money movements out of Australia. It is also working to identify and gain evidence against the senior overseas crime bosses controlling the flow of drugs to Australia.