Illicit financial flows – or the financial transfers of money, assets or other items of value across borders – can drive corruption, create political instability and weaken the rule of law and economic growth.
Drug trafficking is one of the main crimes contributing to illicit financial flows (IFFs). Illegal drugs, including opiates (heroin and opium) and methamphetamine, travel across multiple countries before reaching consumer markets. Whenever organized crime groups move drug shipments across borders, IFFs that enrich them are potentially generated. This wealth can then be reinvested in trafficking, used to commit other serious crimes or laundered to be used in the legal economy.
Understanding IFFs is therefore crucial to addressing them. The new Opiates and Methamphetamine Trafficking on the Balkan Route: Drug Flows, Illicit Incomes and Illicit Financial Flows from the United Nations Office on Drugs and Crime (UNODC) examines the IFFs and illicit proceeds from these two drug markets. Below, find four key takeaways from the report.
The Balkan route supplies illegal opiates and methamphetamine from Afghanistan to Western and Central Europe. Although opiates are consumed in every country along the route, the vast bulk of consumption is concentrated in France, Germany, Iran, Italy, Poland and the UK.*
Methamphetamine, a synthetic drug that can be manufactured anywhere, is a more recent threat, with record-breaking amounts of methamphetamine (possibly from Afghanistan) seized along the Balkan route.
Between 2019-2022, the Balkan route generated an estimated annual illicit gross income of US $13.9 to 21.4 billion. Drug traffickers retained a high profit margin of US $10.9 to 16.9 billion, or 70 per cent of this total. Opiates accounted for 90 per cent of t these profits, while methamphetamine represented a smaller but growing share.
For context, this income surpasses the Gross Domestic Product (GDP) of several countries along the Balkan route, including Afghanistan and North Macedonia. The value of these drug markets also equals public expenditures on public order and safety in some countries.
Between 25-50 per cent of the US $13.7 billion of the income generated from drug trafficking along the Balkan route is illegally moved across borders. These IFFs can undermine economic stability and deepen inequality and instability in countries along the route.
Some of the income from drug trafficking is laundered both domestically and abroad through purchases of real estate, luxury vehicles and other assets. Shell companies, cryptocurrencies and informal systems like Hawala are frequently used to transfer and launder money, making it more difficult to trace illicit proceeds.
Read the report here.
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* Note that the data and analysis do not cover the period following the drug ban in Afghanistan that was imposed in 2022 by the de-facto authorities and its impact on drug consumption and trafficking patterns
