Aleksandr Otdelnov owns a peculiar tourist attraction: a contraband museum. Smuggling has a presence in his native Odessa that dates back to the 18th century. Until it had to close due to Covid-19, the museum displayed everything from pearls and guns smuggled into Imperial Russia to more contemporary loot. Then, in February 2022, came the war. “The port stopped working and everything came to a standstill,†Otdelnov explains. Not only the influx of tourists ended. Odessa had been a key node in a vast crime network centered in Ukraine and Russia and stretching from Afghanistan to the Andes. It was part of the “most powerful criminal ecosystem in Europe,” according to the Global Initiative Against Transnational Organized Crime (GI-TOC) think tank.
The Russian invasion has hit that underworld with the force of an earthquake (see map 1). The vast majority of the ruthless Ukrainian mobsters have stopped collaborating with their Russian counterparts: “We are thieves, we are against any state, but we have decided to be in favor of Ukraine,†says one of them. The lucrative heroin smuggling routes are being reconfigured; and it affects the prices and profits of crime syndicates thousands of miles away. If the disruption lasts long, it could change the face of global crime. Ukraine will also change.
The country has battled corruption since it left the Soviet Union in 1991. The Maidan revolution of 2013-2014 toppled a corrupt president and parts of the oligarchy that backed him. In 2019, Volodymyr Zelensky was elected president on an anti-corruption platform and passed reforms to crack down on the mafia. However, it was at best a half-clean. According to the GI-TOC crime index, the country ranked 34th out of 193 countries before the invasion, and was third in Europe. Ukraine also fared very poorly when it came to perceptions of corruption.
The underworld in government-controlled areas of Ukraine prior to 2022 was mired in intermittent violent disputes between different groups. However, it had three facets that linked the country to global criminal markets. First, a smuggling “superhighway†linking Russia and Ukraine, crossing the eastern areas occupied by Russia in 2014. Second, global smuggling hubs located in Odessa and other Black Sea ports. And finally, the factories dedicated to the production of illicit products destined for export.
That infrastructure supported different business models for different products. The Ukraine was a growing “spin-off” transit route for heroin from Afghanistan, adding to routes across the Balkans and the Caucasus (see Map 2). Before the war, it was the fourth European country with the most heroin seizures. Cocaine from Latin America entered through the Black Sea. In the opposite direction, criminal groups exported weapons to Asia and Africa, mainly from the port of Nicolaiev. In 2020, Ukraine overtook China to become Europe’s largest supplier of illegal tobacco. Local manufacture of amphetamines was on the rise: 67 illegal laboratories were dismantled that year, the highest number on record in any country.
The war has upended everything by creating “an unacceptable risk environment for international illicit trafficking.” The Black Sea ports have been closed or restricted to shipping. The border between government-controlled Ukraine and Russian-occupied territories is now a fortified succession of killing sprees, disabling the superhighway. Recruitment has deprived the underworld of human resources, and martial law has put an end to a wide range of criminal activities. Curfews make it difficult to circulate at night.
Furthermore, Ukrainian gangsters shy away from their Russian counterparts: “It’s one thing to be called a criminal, it’s quite another to be seen as a traitor,†says Mark Galeotti, author of The Vory: Russia’s Super Mafia. Loyalty to Ukraine is as much about patriotism as it is about risk control. “If we were to be annexed by Russia, many of those in prison could be transferred very far away,†explains a member of a mafia group. “Russian guards are relentless. We absolutely do not want such a situation. So we will do Ukraine’s dirty work.”
The ripple effects are being felt around the world as smuggling networks reconfigure to circumvent the country. Turkish customs officials say that heroin and methamphetamine trafficking across the border with Iran has increased. During the first quarter of 2022, Lithuanian customs officials saw the volume of illegal tobacco increase fourfold. Last year, Estonian officials, in collaboration with Europol (the European Union’s law enforcement agency), seized 3.5 tons of Latin American cocaine, worth some €500 million, in the port of Muuga. Similarly, the blockade of Ukrainian Black Sea ports and increased controls in Western Europe may explain the recent large seizures in Russia. On April 10, authorities seized nearly 700 kilos of cocaine in Moscow. Russian mobsters operating along the border with Belarus, a previously marginal area, are profiting from the luxury goods traffic into Russia; especially designer bags.
The war has also brought new short-term opportunities for Ukrainian mobsters. One of them is human trafficking. The UN estimates that some 5 million Ukrainian refugees are under “temporary protection” in Europe, and its statistical model of historical trends indicates that some 100,000 could become victims of human trafficking. There is also a market for the trafficking of conscripts wishing to leave Ukraine. Sometimes it can be as simple as sneaking them through a Ukrainian border post. At least 8,000 have been detained trying to leave the country, most bound for Moldova or Poland. Apparently, the traffickers charge between 5,000 and 10,000 euros. However, so far the scale of human trafficking is not as serious as it could be. “There is,†says a senior Europol official, “but to a much lesser extent than we expected.â€
In Russia, the long-term repercussions of the war on crime are likely to be perverse. According to Galeotti, the State has intensified links with organized crime that were already established, but were only occasionally exploited. Russian mobsters operating outside the country have been required to deposit a portion of their profits into so-called “black accounts,” which Russian spies can access to cover operating expenses. Criminals have been recruited to act as intelligence agents for the Kremlin; above all, to help get around the embargo of some semiconductors that are very necessary in the war effort. The seizure of Western-owned companies in Russia by the Kremlin or its proxies will fuel a new era of cronyism; and, on the other hand, the need to hide cross-border transactions or circumvent the Western financial system will further reduce transparency and accountability.
For Ukraine, the long-term picture is less clear. There is no doubt that a frozen conflict can lead to great risks. Before the invasion, Ukraine had between 7 and 9 million legal firearms. Perhaps there were as many illegal ones. The country is now saturated with weapons. History indicates that wars fuel arms trafficking: arms from Yugoslavia are used in violent crime across Europe. Jürgen Stock, Secretary General of Interpol, has warned of a possible increase in small arms trafficking. So far, however, everything is going well. “We do not observe arms trafficking that we can consider systematic or organized,” says the Europol official.
National drug production could skyrocket again. The US government has recently reported the growth in Ukraine of more distributed networks of small drug labs using the Internet for sale and the postal system for delivery. The greatest risk comes from the rebuilding process. Last month, the World Bank put the cost of rebuilding Ukraine at $411 billion, including $92 billion for transportation and $69 billion for housing. Projects of this magnitude can be easy prey for mafias, who rig public procurement systems and bidding systems to access land, grants and licences.
Still, there is an opportunity to make permanent the decline in organized crime in Ukraine. The main effort must come from within the country. A December bill seeks to reform urban planning: according to government-related documents, the construction sector is prone to “abuse of power”, “general corruption” and “evasion of punishment”. Reuters reported in January that Zelensky had fired four deputy ministers and five regional governors for corruption. “All internal problems that interfere with the state are being solved,†he declared.
Outside pressure can help: Reconstruction funds are likely to come largely from abroad and come with strings attached. Ukraine is still many years away from joining the European Union, but the convergence process with European standards is a lever to combat organized crime. The country obtained candidate status last June.
It is a truism among those who study organized crime around the world that war and social dislocation create opportunities for criminals and their white-collar collaborators. However, there are unusual elements in the Ukrainian experience that could allow for a different outcome. The war has severed physical and social arteries that had existed for decades between the country and Russian criminal networks, and will likely continue to be severed for years. It has given the Ukrainian state greater public legitimacy to combat the oligarchy; and it can increase Western involvement and control of the economy. Nobody sensible believes that in Odesa contraband is going to be relegated to a museum. However, there is a chance that Ukraine will finally cease to be a paradise for gangsters.
