Russian Pressure on Afghan Opiate Trade and Money Laundering Throws Down the Gauntlet to U.S. and Western Europe
July 27, 2014 • 9:49AM

With the newly released Financial Action Task Force (FATF, OECD, Paris) report, Financial Flows Linked to the Production and Trafficking of Afghan Opiates, forceful Russian pressure on counternarcotics and financial system complicity in money laundering has now put a challenge on the table for the U.S. and Western Europe. Although much of the expertise in the report comes from Western Europe and the United States, according to sources, the pressure came from Moscow, led by Russian Federal Drug Control Service head Viktor Ivanov, and his colleagues Yury Fedotov, head of the Vienna-based UN Office on Drugs and Crime (UNODC), and Vladimir Nechaev, who until June headed the Financial Action Task Force (FATF) in Paris for a year. Ivanov was to present a combined Counternarcotics- Alternative Development plan to shut down the cocaine and heroin "world production centers" at the June G8 Summit in Sochi, until it was sabotaged. Now Russia is proceeding with the BRICS, which means Russia, India, and China are getting ready for an offensive against NATO's failure to stop the Afghan heroin and money-laundering boom.

Although the report built on UNODC and Paris group efforts on typologies of how narcotics money gets laundered, the new report amounts to a damning statement, not explicit, but clear, of the failure of governments and their Financial Intelligence Units (FIU) which are responsible for tracking Anti-Money Laundering/Countering the Finance of Terrorism (AML/CFT) under FATF rules. Under the rubric "Key Findings:"

"Observation 1. Drug trafficking is a business, but our understanding of this enterprise and response to it remain limited—less than 0.5% of the total laundered funds are seized."

EIR: As Viktor Ivanov has pointed out, and echoed by former UNODC heads Antonio Maria Costa and Pino Arlacchi, and Russian money laundering expert Konstantin Sorokin in interviews with Executive Intelligence Review, despite overwhelming law enforcement investigative proof that HSBC, or Wachovia Bank for that matter, had laundered hundreds of billions of dollars of cocaine cartel money, no prosecutions! What are you protecting, Attorney General of the United States Eric Holder? And is not the Obama Administration complicit in the drug legalization campaign, in fact leading to legalizing the trillions already laundered into the highly protected financial/business machines?

"Observation 5. International opiate traffickers rely on the services of financial professionals, either unwitting or complicit, to manage their assets, but no global system exists to alert countries or the private sector of these individuals and entities, or to freeze the assets of opiate traffickers."

EIR: Between 2007 and 2008, in the midst of the shutdown of the London-centered Inter-Bank Market, HSBC-Mexico transported $6-7 billion in U.S. dollar bank notes to HSBC-NY, which turned them over to the Federal Reserve Board of New York run by Timothy Geithner. A large percentage of those dollar bank notes from Mexico were from the North American retail side of the cocaine trade. None, literally none, of that money was seized and forfeited. A neighborhood junky/trafficker loses his Cadillac and goes to jail, but not HSBC. In fact, the cocaine cash added to the Feds' ability to extend trillions in bailout loans to the bankrupt megabanks, as well as currency swaps with the Bank of England and the European Central Bank! No wonder, as the FATF reports, only 0.5% of narcotics financial flows are tracked down and seized.

"Observation 9. The majority of illicit funds are likely moved through, and possibly stored in, financial centers. As the region's leading financial center, the United Arab Emirates financial system appear to be particularly vulnerable to abuse by opiate traffickers, regionally and internationally."

EIR: The Dubai International Financial Center was created by London-centered banks as an offshore paradise in 2004, just in time to become the financial center for the Eurasian heroin boom, which expanded up to 30 times under the ongoing NATO troop presence in Afghanistan.


"Among the destination points in the global picture, the U.A.E. appears to hold the first place by attracting most of the drug-related cross-border flows. According to both the survey results and the available analytical studies, Dubai seems uniquely important for the Afghan opiates trade. It is not only a place to make deals, arrange shipments and establish criminal contacts but also a global financial center for cash movements, MVTS transactions, the accumulation of criminal proceeds in the bank accounts and the investment of criminal assets."

The United States, with its military involvement in Afghanistan, has extensive intelligence assets in the region, including the Kabul-based Afghan Threat Finance Cell, the Stuttgart-based EUCOM Joint Interagency Counter-Trafficking Center, etc. With the BRICS now setting up their own interagency counternarcotics coordination, is time that the intelligence in the hands of U.S. intelligence agencies about the Eurasian Afghan- supplied heroin economy be shared with the Russian, Chinese, India, and other Financial Intelligence Units.