Prague, Mar. 4 (RFE/RL) - An annual report released
worldwide last week by the International Narcotics Control Board (INCB)
says Russia and the formerly communist countries of eastern Europe are
particularly vulnerable to money laundering.
The board's findings were announced last week at a news conference at
the United Nations information center in Prague. The board is an
independent control agency for the implementation of U.N. drug
conventions. The report was based on information provided by
governments, the international police organization "interpol,"
national police and non-governmental organizations.
The 1995 report focuses on Russia and eastern Europe, but also
comments on the spread of cocaine abuse in West Africa, the
increasing worldwide use of the stimulant methylphenidate and the
continuing unregulated global flow of chemicals needed for the
manufacture of cocaine and heroin.
Andreas Nicklisch, the head of the U.N. information center in
Prague, says the on-going privatization of state-owned properties and
weaknesses in the supervision of increasing numbers of financial
institutions increase the chances for money laundering in eastern
Europe. He noted that money from drug-related crimes is either
integrated into the economy, or it is used to "corrupt and undermine
the political and official structures in the process of buying into
public opinion." He said the money integrated into the economy
creates "competitive advantages" for criminals.
Nicklisch said that the link between money laundering and drug
trafficking is strong in Russia "where money laundering is not a
criminal offense under current national legislation." He noted that
money laundering there is often conducted through private businesses,
insurance companies, financial institutions, and newly privatized
factories, companies and hotels.
He said trafficking groups from CIS members have established
international links by "outposting their members into foreign
countries." He noted that what he called the "Russian mafia" is
especially active in Austria, Cyprus, the Czech Republic, Germany,
Hungary and Poland.
The report says that the absence of comprehensive drug legislation
in eastern Europe is a key reason for the growing problem of money
laundering there. The report notes that legislation has been drafted
in several countries, but has not yet been adopted. Hungary and the
Czech Republic have adopted laws against money laundering.
According to the report, Russia, Ukraine, Poland and several
countries in southeastern Europe are increasingly being used by South
American drug cartels as transit countries for cocaine destined for
western Europe. The use of these countries as transit routes for
drugs is a factor contributing to an increase in drug-related crimes
and local drug abuse.
The Czech Republic, Hungary, Slovenia and Croatia also have
reported increased trafficking and abuse of LSD (a hallucinogen). The
study found that most of the LSD found in Europe originates in the
The report concludes by noting that fighting money laundering is
an effective way to combat drug trafficking and organized crime.
Among the report's recommendations are the establishment of a
"comprehensive worldwide framework to more effectively coordinate
action against money laundering," the introduction of legislation
against money laundering, and the reporting of suspicious
transactions to a specialized body. But Nicklisch noted that the
board is only "an international watchdog" of the global drug scene.
"Decisive action is up to governments," he said.