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date: 10 December 2022

Transnational Organized Crime and Terrorismfree

Transnational Organized Crime and Terrorismfree

  • Katharine PetrichKatharine PetrichRockefeller College of Public Affairs and Policy, University at Albany, SUNY

Summary

A significant, policy-relevant relationship exists between terrorist groups and transnational organized crime. However, definitional challenges, disciplinary boundaries, and legal logistics all contribute to the mischaracterization of the relationship, leading to piecemeal responses and uneven academic attention. International studies research tends to focus on one or the other, with an emphasis on terrorist group dynamics and choices. Two enduring rationales for separating the study of terrorism from that of transnational organized crime exist: the “greed versus grievance” debate, which argues that organizations pursue either private (financial) goals or public (social or organizational change) goals and the “methods not motives” argument, which suggests groups may overlap in their tactics but diverge in their strategic goals. Terrorist violence by criminal groups is largely held separate from the “transnational crime and terrorism” literature, often categorized instead as “criminal governance” rather than terrorism studies. The reality is much more nuanced: both group types pursue a variety of objectives and engage with a spectrum of actors which may or may not share their aspirations. Members are diverse in their priorities, a fact that is often lost when analysis collapses the rank and file with leadership into a monolithic bloc. Additionally, globalization has increased opportunities for groups to pursue different activities in different theaters. In areas where terrorist groups are contesting for political control and seeking to present themselves as viable alternative governance actors, they may be less likely to work openly with illicit actors, but in areas (or countries) where they have little governance ambition, criminal networks may be important public partners.

These groups intersect in a spectrum of ways, from engaging in temporary ad hoc relationships designed to achieve a specific goal, to fully incorporating the opposite type’s motive into organizational priorities. Political ambitions largely center on power and control, but illicit activities are wide ranging, with the most prominent involving firearms, drugs, and people. Further, there are several important enabling factors that foster these relationships, including corruption, illicit financial flows, fragile states, and lootable resources. When these enabling factors are present, diversification and relationship building are more likely, increasing organizational resilience and making demobilization less likely. These factors, particularly corruption, also increase the chances of organized crime entering the political system.

Looking ahead, both policymakers and academics should consider transnational organized crime and terrorism more holistically. Work that engages with only one element will fall short in assessing the dynamics of irregular conflict, leading to incomplete analysis and weak policy recommendations. Observers should cultivate the flexibility to think in terms of networks and variety across geographic contexts—the way that a terrorist group behaves in one area or with one type of criminal group does not necessarily predict its behavior globally.

Subjects

  • Conflict Studies
  • International Law
  • Political Economy
  • Security Studies

Introduction

Globalization has brought many benefits for the world in the 21st century: global interdependence means a richer, more peaceful world where people, goods, and ideas move quickly and easily beyond their places of origin. But alongside the benefits, disruptive actors have also capitalized on the shift. Products of “deviant globalization,” these challengers include transnational organized crime groups and terrorist organizations. Powerful on their own, together their impact could be devastating, especially for developing states. Thus, a key question for policymakers is whether the “crime-terror nexus” is an overblown fear or a legitimate relationship. From there, other important questions follow. If it does occur, what are the contours of the interaction? Do criminal terrorists represent a greater or lesser threat than their politically oriented counterparts? Are organized crime groups poised to topple governments? Where is it most likely to occur? How best can governments, organizations, and individuals respond to it?

The history of transnational crime and terrorism relationships can largely be split into before and after the September 11 attacks. Before 2001, transnational criminal groups and terrorist organizations interacted in a largely transactional manner (Schmid, 2018). For example, terrorist groups might seek out “specialist” organized criminals for help securing counterfeit passports or smuggling members across borders, and transnational organized crime groups might negotiate with terrorists for the right to operate within their sphere of influence (Shelley & Picarelli, 2002). Some groups did rely on crime to support their operational efforts, like extortion and “tiger kidnapping” campaigns run by the Provisional Irish Republican Army and the Ulster Defense Forces during the 1990s (Silke, 1998). During the 1980s and 1990s, these sorts of piecemeal interactions flourished due to increasing economic interdependence outstripping international regulation; further, nonstate actors did not warrant the same type of attention as states did in the international rebalancing after the Cold War. Terrorist group excursions into criminality during this period were generally focused on domestic populations closely situated to the group—this was the era of the petty and domestic offense, not sophisticated international networks. In the post-9/11 security environment, terrorism remains one of the most significant security concerns among policymakers. Such groups’ convergence with or diversification into sophisticated criminal activity represents a major force multiplier, augmenting their ability to disrupt and undermine legitimate governance, resist demobilization, and continue to carry out attacks against civilian populations. In reaction to the upswing in attention, some authors have argued that the relationship is overhyped and represents a much smaller set of interactions than what is portrayed in the discourse. Nexus naysayers argue that the two group types can be differentiated by a bright line due to their dramatically different goals: for terrorist groups, having a politically violent operational goal means that the need to spend money actually outweighs the imperative to earn money (Aliu et al., 2017).

After the attacks on the World Trade Center in 2001, the United States dramatically increased scrutiny of terrorist financial networks—a move that was followed by other states as attacks struck India (2002), Russia (2004), Spain (2004), and the United Kingdom (2005). Such attention, in the form of sanctions, asset seizure, account freezes, international arrest and apprehension, and military operations targeting group leadership led terrorist groups to diversify their sources of funding as well as their operational capabilities and recruiting pools. No longer could groups consistently rely on financial support from sympathetic state actors or wealthy individuals, as al-Qaeda and Hezbollah did during the 1990s.

Cut off from “angel investors” after 2001, terrorist groups have become significantly more likely to rely on illicit or “grey market” financing schemes to support their work. At a minimum, counterterrorism financing measures require terrorist groups to become at least partially competent money launderers because these laws criminalized the movement of money to terrorist groups. Following the money also became a critical component in counterterrorism operations, making groups that did not or were unable to launder funds well particularly vulnerable to disruption.

Interactions between transnational organized crime and terrorism are deeply nuanced and context specific and can be broadly separated into four nodes: ad hoc, continuing, diversified, and converging relationships. Understanding the enabling and demand factors that provide oxygen to terrorist criminal opportunities is key to both understanding the interwoven dynamics as well as developing effective policy responses. Particular attention should be paid to the role of corruption, illicit flows, and lootable resources.

Researching transnational organized crime and terrorism is challenging. Both actor types are incentivized to hide their activities, scope of influence, organizational relationships, and financial assets. Because of this active concealment, quantitative scholars generally rely on government and law enforcement reporting or externally observable actions like attacks. Criminal activity is often overlooked in these studies because it serves logistical or financial purposes for a terrorist group, as opposed to directly contributing to kinetic attacks. Relying on official figures is not without its challenges: what gets counted and how is an inherently political act (Andreas & Greenhill, 2010). States have their own incentives to misrepresent levels of both violence and criminality, and the same accessibility issues that hinder independent researchers can hinder official sources as well. Qualitative scholars struggle with issues of access, data triangulation, and generalizability, resulting in an oversaturation of particular cases and sources. Existing scholarship focuses primarily on developing states, particularly those with weak institutions, preexisting criminal economies, and high levels of corruption (Shelley, 2014). In truth, however, transnational organized crime touches every corner of the world, including the WEIRD countries (Henrich et al., 2010).1 In fact, many of the most problematic and durable linkages are situated in the Global North (Makarenko & Mesquita, 2014).

Terrorism

What Is Terrorism?

Terrorism has a long history, appearing in nearly every asymmetric conflict. One of the earliest accounts of terrorism centers on nonstate actor resistance to the Roman Empire in the Judea Province in the 1st century ce (Chaliand & Blin, 2016). Groups of all religions, national origins, political aims, and ideological creeds have used violence or the threat of violence against civilian targets to seek political or social change. In the 21st century, there is an unfortunate tendency to associate terrorism with fundamentalist Islamist groups and to assume al-Qaeda “invented” terrorism in September 2001 (Laqueur, 2001). In reality, in 2019, 265 distinct terrorist groups were active across six continents and carried out attacks in more than 70 countries (National Consortium for the Study of Terrorism and Responses to Terrorism (START), 2019).

Terrorism is a tactic, commonly understood to mean the use of violence (or threat of violence) by a nonstate actor against a civilian or other nonlegitimate target, with the intent of achieving a political, social, economic, or ideological goal (Ganor, 2002; National Consortium for the Study of Terrorism and Responses to Terrorism (START), 2019; Saul, 2019). Generally, the true targets of terrorism extend beyond the immediate victims of violence to include the broader community. The purpose of terrorist attacks is to generate fear due to indiscriminate violence. Because terrorism is a tactic and may be used as part of a suite of activities, deciding exactly who is a terrorist is a fraught political endeavor. For nonspecialists and the media, terrorist groups can be difficult to differentiate from rebel, insurgent, criminal, or guerrilla groups, despite variations in their technical definitions.

Why Is Terrorism Problematic?

Terrorism generates far more consternation among policymakers and fear among the public than other forms of violence, particularly in WEIRD countries. This is true for terrorist attacks of all types and ideologies and has spurred major counterterrorism initiatives both domestically and internationally. Most terrorist attacks and associated deaths occur in areas experiencing high levels of violence in general, up to the level of civil war; geographically, this maps onto the Middle East and Africa (Ritchie et al., 2019). By the numbers, crime kills and harms far more individuals than terrorist groups do, in all areas of the world. Indeed, in the United States, driving a car or taking a bath are more likely to kill you than a terrorist attack (Mueller & Stewart, 2018). However, despite the large divergence between perceived and actual danger, terrorism occupies far more media and policymaker attention than statistically more risky activities.

This gap between real danger and perceived threat is one of the reasons terrorism is so problematic: the effects of an attack are exponentially greater than the direct harm caused by the violence. Terrorism creates trauma and uncertainty among observers, due in part to the apparently random nature of victims, attack patterns, or attack locations (Mueller & Stewart, 2018). In response, individuals are less likely to invest in long term, durable activities, businesses, or communities. Further, terrorism erodes the social contract enacted between the citizen and state, undermining confidence in governance institutions with negative follow-on effects, particularly in democracies. To prevent and respond to terrorist attacks, governments often turn to draconian counterterrorism measures, creating cures that are worse than the disease. At best, they may resort to “security theater”—measures that may make citizens feel safer but have little functional purpose (Schneier, 2008). Both types of response do little to reduce the risk of terrorism or the feeling of insecurity terrorism provokes.

Transnational Organized Crime

What Is Transnational Organized Crime?

Like terrorism, transnational organized crime is an activity (or tactic). Thus, there is controversy over the specific dimensions of transnational organized crime—every legal jurisdiction defines the concept a little differently (Allum & Gilmour, 2022). Practitioners and academics understand it differently too, with variations appearing depending on whether the writer is a political scientist, economist, or criminologist. Some of the debate and controversy over the relationship between transnational organized crime and terrorism is simply a function of researchers and commentators using terms interchangeably when they in fact vary in their definition, making it challenging to range the relationship (Picarelli, 2012).

International conventions represent the broadest definitional category. Under the United Nations Convention Against Transnational Organized Crime (UNTOC), transnational organized crime are serious crimes carried out by organized criminal groups of more than three individuals, “in order to obtain, directly or indirectly, a financial or other material benefit” (UNTOC, 2000, p. 5). To be transnational, criminal activity must occur across interstate borders; this can happen in several ways and is not simply confined to physically moving across an international border. A crime is transnational if a substantial amount of the preparation, planning, or direction took place in a state other than the one in which the crime actually took place, or if the group that committed the crime is active in multiple states (UNTOC, 2000). A crime can also be transnational if it has significant follow-on effects in a second state. This scope is wide enough to compensate for the jurisdictional challenges created by Westphalian sovereignty, and this framing is regularly used by academics as a starting point for their own definitions.

Academic definitions of transnational organized crime vary according to study scope and are largely concentrated on organized crime, tacking on the transnational element as appropriate. Some exceptions exist: Allum and Gilmour (2022), for example, offered that transnational organized crime is “the passing of illegal goods and/or services over national borders and/or rendering criminal support to criminal activities or related persons in more than one country” (p. 8). Van Dijk and Spapens (2013) viewed transnational organized crime as “a group of actors moving from one country to another to execute illegal activities” (p. 17). More often, authors offer a survey of common organized crime elements. Shelley (2005) identified several themes, including the ongoing nature of the criminal activity, the fact that multiple (at least two) people are involved, and that groups pursue “profit and power” goals through the use of violence or threat of violence (Shelley 2005, p. 14). In general agreement, Albanese (2011) also highlighted the literature’s attention to the rational orientation of criminal groups, which propagate themselves through “use of force, threats, monopoly control, and corruption” (p. 4).

One of the most significant mistakes in the discussion of crime and terrorism is the conflation of different types of criminal sophistication. While some definitional debates appear pedantic, this one has real relevance. The misuse of petty, organized, and transnational organized crime creates interventions that are grossly inappropriate for the type and intensity of criminal behavior. In essence, by using the “wrong” term and overestimating the level of criminality, academics and policymakers alike can recommend surgery with a chainsaw over a scalpel. Underestimating the level of sophistication has its own drawbacks, as it can open the door for institutional capture and endemic corruption. In addition, conflation erases the important variations in how terrorist groups engage with different types of crime—for example, those seeking legitimacy are less likely to engage in petty crime but may well involve themselves in organized and transnational crime (Asal et al., 2019). These mistakes can be made from actors as wide ranging as individual academics writing an editorial to intergovernmental organizations drafting policy.

Why Is Transnational Organized Crime a Problem?

The idea that transnational organized crime, and organized crime more generally, represents a national and international security challenge is not new (Williams, 1994). However, following the end of the Cold War and the shift toward globalization, the scale and reach of transnational criminal organizations has grown exponentially. At the individual level, criminal syndicates exploit, extort, and harm people—creating fear and trauma that makes it difficult to invest in the future, trust one’s neighbors, or pursue legitimate enterprise. At the community level, high levels of crime divert public resources into increased law enforcement, drug treatment and deradicalization programs, and safeguarding public officials. Crime also effects communities by decreasing travel and tourism, along with investment from both external and internal entrepreneurs, and skimming off government revenue that should be reinvested into the community. At the state level, crime impacts the workings and reach of institutions, eroding the legitimacy critical for their missions. It undercuts the social contract by demonstrating that the state cannot effectively provide security to its citizens, making the state more vulnerable to overthrow or capture by illegitimate actors (Williams, 1994). The associated corruption (or perceived corruption) of governance actors makes it difficult for the state to act in the international arena, to advance foreign policy interests, and to defend itself against predatory state competitors. Finally, at the international level, a high level of criminality makes other states less like to invest, trade, or engage with a state. A state characterized by powerful criminal actors, particularly transnational ones, can act as a “safe haven” for those groups to avoid disruption and prosecution. This can lead to sanctions, isolation, or even intervention in an attempt to disrupt criminal networks based there. These actions have negative consequences for the civilian population of the state, cause significant amounts of collateral damage, and can result in cyclical violence as power vacuums created by intervention generate increased competition among the remaining actors.

Sophisticated, large scale criminal organizations can outstrip the capabilities of the state they inhabit, creating a dynamic in which legitimate institutions are crowded out and criminality is effectively institutionalized (Coggins, 2015). The World Atlas of Illicit Flows (Nellemann et al., 2018) assessed that 38% of worldwide conflict financing comes from environmental crime alone—suggesting that the true impact of crime on conflict is much broader. Conflict economies centered on criminality, particularly those crimes involving the transportation of goods and people across borders, are key enablers of violence. Even short of war, transnational organized crime creates and sustains violent dynamics that harm the communities in which they are embedded in a multitude of ways.

Types of Transnational Organized Crime

Transnational organized crime is usually organized either by the type of activity or the type of target. The so called “big three” most prevalent and profitable crimes are drugs, arms, and people, followed by cybercrime and environmental crime. Boister and Currie (2014) used three “buckets” to understand transnational crime: substantive crimes (those involving people as products), commodity crimes (those broadly involving the movement or production of illicit goods), and facilitative and organizational crimes (those that allow other forms of criminal activity to occur or be successful). Another way to conceptualize transnational organized crime is to differentiate between origin, transit, and market countries, or where illicit materials begin, move through, and end up. Most illicit goods and profits flow from the developing to the developed world, with the major exception being firearms. Differentiating between these types of crime is important because they have different enabling conditions, spillover effects, and solutions.

Drugs

Drug trafficking is perhaps the most notorious of all transnational organized crime and has been the target of innumerable domestic and international disruption initiatives. Drugs are a major source of revenue for many types of nonstate (and state) actors. According to the annual World Drug Report produced by the United Nations Office on Drugs and Crime (2021), drugs can be categorized into five broad categories: cannabis, opioids, cocaine, amphetamine-type stimulants, and new psychoactive substances. The scale of drug usage, markets, and trafficking is staggering: in 2020, approximately 275 million people used drugs globally (United Nations Office on Drugs and Crime, 2021). Assessing the market is a complicated task, because of the large quantity of drugs as well as the concerted efforts of buyers and sellers to hide their activities, but best-guess estimates place the market at over $1 billion annually (United Nations Office on Drugs and Crime, 2021). Large-scale trafficking requires both organizational sophistication and enabling conditions like weak state institutions, corruption, and relevant labor populations. Because of these factors, states with significant drug production economies are often also home to violent nonstate political actors, or see drug trafficking organizations enter the political realm, resulting in the so-called narco-terrorism phenomenon.

Guns

Firearms trafficking, or the illicit movement and sale of guns, is both a form of transnational crime and a key driver of nonstate actor violence. Gun trafficking is a complicated issue in part because the traditional origin and market countries are reversed. Most firearms on the black market are produced licitly in the Global North and then diverted into illicit marketplaces and transactions in the Global South, though markets vary significantly across time and space (Marsh & Pinson, 2021). States are often the merchants or brokers of firearms transactions, making interdiction difficult. As a durable good, large quantities of available illicit guns are those remaining from interstate or civil conflicts, creating an opportunity window for terrorist groups operating in weak (or weakened) states to divert, use, and sell firearms in support of their continued activities. Terrorist groups and transnational organized criminals use firearms both as a tool of violence and as a form of currency, making the buying and selling of weapons a key issue.

People

Crimes involving people as goods generally fall into two categories: human trafficking and smuggling. While the activities are similar and may overlap, they are distinct. Human smuggling involves individuals paying for covert or illicit transportation, across one or more borders. They are free to leave at their destination or may be able to part ways with the smugglers en route if they wish. Individuals who participate in smuggling are usually migrants seeking to enter a new country without documentation, or people seeking to avoid official attention or a record of their entry into (or exit from) another country (McAdam & Baumeister, 2010).

Human trafficking involves

the recruitment, transportation, transfer, harbouring or receipt of persons, by means of threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation (United Nations General Assembly, 2000).

In essence, trafficked individuals are not free to leave, even if they entered into the arrangement voluntarily (McAdam & Baumeister, 2010). While the majority of trafficking occurs across borders, domestic human trafficking—for the purposes of sex, domestic, and other forms of labor—represents approximately 25% of human trafficking (United Nations Office on Drugs and Crime, 2012). Humans are “durable goods” and represent consistent revenue for illicit organizations. Forced prostitution and sex work are the most widely known aspects of trafficked labor, but sectors like childcare, household cleaning, construction, fishing, or farming are all major destinations for trafficked persons. In addition to producing a profit through their labor or sale, they may also be used as fighters or support staff for terrorist groups. Beyond their labor, trafficked people may be used as “rewards” for loyalty or bravery from terrorist group members. One high-profile example of this dynamic was the enslavement of Yazidi women by ISIS beginning in 2014 (Vale, 2020). Further complicating the issue, smuggled and trafficked people may move along the same routes, by the same facilitators, even in the same shipment.

Intersections Between Transnational Organized Crime and Terrorism

In some contexts, diversifying into transnational crime contributes to a terrorist group’s overall mission. The operational emphasis largely centers on charity groups being used to funnel monies to terrorist groups, a weight that continues today to the exclusion of other sources. It is important to differentiate monies that begin from licit sources and are diverted into terrorist control from funds that originate from illicit activities, because the policy implications and community impacts are significantly different. Terrorist group funding supports direct financial benefitsdistribution to constituent populations, as well as the provision of jobs or social services. Groups can further their goal of political disruption by diverting funds that would otherwise go to the government, particularly in the cases of natural resource theft and tax extortion. By capturing these funds, the terrorist organization effectively reduces the governmental means to fund counterterrorism efforts or fulfill the social contract. Resource diversion in fragile states is particularly harmful: Rai found that the most vulnerable countries to terrorism operate at a $3 trillion to $5 trillion infrastructure deficit, a gap that terrorist groups and disruptive actors actively exploit and increase (2017). Terrorist groups that disrupt state capacity also reduce legitimacy, worsening the degree of fragility and making the state more vulnerable to illicit capture.

Funding source diversification has become exponentially more important to terrorist groups in the post–9/11 strategic environment, as both international law and financial regulators catch up to “traditional” methods of financing (Brisard & Martinez, 2014). Illicit activity is a huge potential revenue stream, and it makes intuitive sense that terrorist groups would explore existing criminal opportunities in their area of operation. In 2018, the largest portion of terrorist illicit funds came from the drug trade, followed closely by oil, gasoline, and diesel smuggling (Nellemann et al., 2018). Regional differences alter the proportion of funding streams, but in addition to drugs and fuel, terrorist groups also earn money through taxation/extortion, kidnapping for ransom, human trafficking, arms smuggling, commodities smuggling, and antiquities trafficking. Beyond the direct harm caused by transnational crime, such criminal economies can create an economic incentive for terrorist groups to continue hostilities and resist demobilization (Cornell, 2007).

Greed Versus Grievance Debate

One of the primary justifications for separating transnational organized crime and terrorism linkages is the theorized tension between “greed” (profit motive) and “grievance” (social or ideological motives), a concept borrowed from work by Collier and Hoeffler on civil wars (2004). In this greed-grievance debate, criminal groups are assumed to be “greedy” actors: largely rational, cost-benefit motivated groups who make operational and organizational choices based on financial considerations. In Hoeffler’s words, criminal groups are “private” actors, interested in personal gain rather than the public good created by government transition (2011). Terrorist groups, in contrast, are understood as “grievance” actors, who pursue actions based on their ideological or social visions and are ultimately interested in the “public good” of their desired social and political system. Based on these apparently conflicting motivations, it seems unlikely that the two types of groups would work effectively together over the long term.

This presumed divergence undergirds most work conducted before 2001, and a good deal of the policy literature produced in the early years of the 21st century. However, as the field of terrorism studies attracted more attention in the years following September 11, 2001, the academic community began to challenge this assumption. In 2004, Makarenko (2004) argued that the relationship between criminals and terrorists should be more appropriately understood as a spectrum, in which both types of groups learn and adapt based on lessons learned from each other and incorporate the other’s behaviors into their organization. The supposed greed versus grievance debate breaks down further when logistical constraints imposed by stringent terrorism financing measures are considered: some terrorist groups quite literally cannot afford to have moralistic views on illicit activities. Finally, the greed versus grievance cleavage overlooks the human ability to balance competing aims. Criminals can hold political and social views and work to shape their communities like citizens with licit employment, just as terrorist organizations can seek both personal enrichment and political change (Hutchinson & O’Malley, 2007).

Political Activities by Criminal Groups

Political scientists have historically focused on the terrorism side of the crime-terror equation. This imbalance is due to several factors. First, disciplinary boundaries and security studies frameworks steer researchers toward actors with explicitly political goals. Second, it has seemed far less common for criminal groups to diversify into sustained political violence, particularly at an organizational level. Finally, disagreements about “methods or motives” classifications have siloed some of the research, among both academics and policymakers (Shelley & Picarelli, 2002). However, a growing body of scholarship is seeking to address the use of political violence by criminal groups gap (Phillips, 2018). Crime-terror and criminal governance researchers are coming together to build a broader understanding of the political diversification of criminal groups, with a strong emphasis on drug trafficking organizations, particularly those in Latin America (Blume, 2017; Longmire & Longmire, 2008; Phillips, 2018; Trejo & Ley, 2020, 2021). As a result, criminal political violence is most commonly characterized as a function of “narco-terrorism,” a term first applied to Peru’s Sendero Luminoso in the 1980s (Shelley, 2014). Criminal groups actively seek to influence the political context in which they operate, and some criminal groups do use terrorist tactics to advance their organizational interests. A small number develop broader political ambitions. However, while criminal groups may leverage terrorist tactics, they do not seem to seek wholesale control of the state as terrorist groups do and show willingness to rely on indirect means like corruption and intimidation to coopt state actors.

Violence against political systems and representatives by criminal groups is usually understood as a method to incentivize the state to “leave [them] alone” and allow them to carry out profit seeking activities (Phillips, 2018). Less central is the desire to provide governance benefits, though in some instances criminal groups enforce both formal and informal institutions within their areas of operation (Feldmann & Mantilla, 2021). In keeping with the desire for the state to stay out of their way, political contestation may be violent, but the scope is narrow. Thus, the most common terrorist tactic employed by criminal groups is targeted violence against highly visible individuals. Trejo and Ley (2021) argued that terroristic political assassination is an avenue for criminal groups to consolidate the territorial control necessary for licit and illicit market control, resource extraction through extortion, and establishing a criminal monopoly. They suggested that organized crime (specifically Mexican drug cartels) uses targeted attacks to establish governance regimes, with limited territorial aims.

Types of Relationships

Relationships between criminal and terrorist groups vary greatly across time, space, and organization. They range from transitory to deep enmeshment. Just as there are a range of relationships, so too are there a range of disruption responses, ways to study group interactions, and opportunities to engage with involved actors. Relationships can be conceptualized on a spectrum (Makarenko, 2004), beginning with “ad hoc” before moving to continuing, diversified, and converging dynamics.

Ad Hoc Relationships

The lowest level of interaction between transnational organized crime and terrorism can be characterized as “ad hoc” relationships: interactions or exchanges of goods and services designed to fulfill a specific need. This may be purchasing a falsified passport for a terrorist operative from a counterfeiting ring or paying a terrorist group for the right to transit goods through their area of influence in the same way legitimate businesses pay customs dues to state governments. Examples of this type of relationship abound, but one of the most consistent is the purchase and use of counterfeit documents, as exemplified by Ahmed Ressam, the “Millennium Bomber,” who used both fake French and Canadian passports at various points in his activities (Hewitt, 2008). Hutchinson and O’Malley (2007) argued that ad hoc relationships are the most common because while groups do cooperate based on need, interactions are generally limited for several reasons. Firstly, transnational organized crime groups would rationally perceive terrorist organizations as either a rival or a liability. Further, participating in political violence would be risky business for organized crime, as introducing grievance logics into a “greedy” organization would make the group less profitable and make leadership vulnerable to internal dissent and betrayal. In the same way, incorporating profit motivations into a group with “pure” grievance causes would increase vulnerability to ideological erosion, corruption, and loss of moral legitimacy. For terrorist groups, the loss of externally perceived legitimacy could be particularly devastating—insurgency requires a significant popular support for fighters to remain ahead of government prosecution, a concern shared by terrorist groups (Tse-tung, 2005). Further, the centrality of profit motivation could make it more likely that criminals would betray their terrorist counterparts to the authorities in exchange for a payout. Therefore, terrorist groups may seek out the assistance of criminal groups for specific benefits or in situations where criminal groups dominate the relevant illicit market, but only in situations where cooperation will not compromise political aims (Hutchinson & O’Malley, 2007).

Continuing Relationships

Continuing relationships are often built on ad hoc foundations, where organizations find they need the services of the other group type more consistently than a one-off exchange. Examples of these types of interactions include terrorists paying off powerful criminal groups for the right to create a “safe haven” in their territory or regularly buying guns for their fighters from a trafficking ring. Alternatively, continuing relationships may involve criminal groups paying “taxes” for the right to operate within an area controlled by a terrorist group, as Colombian cocaine cartels did to the Fuerzas Armadas Revolucionarias de Colombia in the 1990s and early 2000s (Freeman, 2016). Finally, continuing relationships include those where the two network types “exchange” criminal assistance, as Italian organized crime did by trafficking arms for North African terrorist groups, in exchange for help for their narcotics trafficking enterprise (Makarenko & Mesquita, 2014). Shelley and Picarelli (2002) argued that both criminal and terrorist groups operate using a network of “loosely organized cells” to maximize operational security and flexibility (p. 307), a format that lends itself to both ad hoc and continuing relationships as individual cells can cooperate based on their specific operational needs. Unsurprisingly, ad hoc and continuing relationships are the most common type of the crime-terrorism nexus in states with developed and sophisticated law enforcement capabilities because they are the most resilient to disruption (Makarenko & Mesquita, 2014).

Diversification

Diversification seems to be most commonly an evolutionary response for terrorist groups squeezed by resource constraints. Pursuing criminal activity can be a reaction to a loss of revenue from another source and so may result from factors like more stringent government counterterrorist financing measures, or the loss of a major sponsor (both private individuals and states). An example of this need-based diversification can be seen in the 1970s Northern Ireland conflict, when the Irish Republican Army (IRA) began “smuggling livestock, cars, and weapons; running protection and extortion rackets; managing underground brothels; orchestrating prison breaks; bank robbery, tax evasion, and construction fraud” in response to losing diaspora funding from increased U.S. law enforcement (Hamm, 2007, p. 6). Diversification may also be prompted by the recognition of the benefits of bringing certain criminal capabilities “in house,” thereby eliminating the need for (and vulnerability posed by) relationships with external criminal organizations. Finally, it may also be a result of the increased recruitment of individuals with criminal histories and skills; rank-and-file members may continue to “freelance” while participating in terrorist activities, or leadership may recognize that new recruits represent a new resource and incorporate criminal activities at the organizational level (Basra & Neumann, 2017).

Diversification is similar to continuing relationships in that it involves a more consistent incorporation of opposite-type activities but differs because skills are developed within an organization, rather than presenting as a relationship between two groups. It is distinct from convergence because the diversifying group does not try to balance criminal and political goals; rather, it remains primarily interested in its original mission set. Often diversification for terrorist groups involves seeking the financial benefit of low-priority crimes like cigarette smuggling or intellectual property theft (Shelley, 2014). For example, Boko Haram fighters might traffic and consume tramadol or trade illicitly mined gold, but the group is uninterested in balancing these activities with its larger political aims at the organizational level (Ogbonnaya, 2020; Santacroce et al., 2018). For criminal groups, diversification may be prompted by increased competition, either between other criminal groups or from the state. Continued political violence may serve to create or maintain the operational space needed to carry out illicit activities.

Convergence

The merger of criminal groups with terrorist organizations is something of an ahistorical policy bogeyman—much discussed, greatly feared, but (so far) mythical. However, there have been instances of terrorist organizations broadening their strategic interests so completely as to become a transnational criminal enterprise (Makarenko & Mesquita, 2014). Often, convergence is a criminal or terrorist group and may be more appropriately understood as an organization shifting toward governance rather than disruption. Asal et al. (2019) found that insurgent groups that are older and control territory are more likely to diversify into crime, particularly those activities that require building and maintaining physical and administrative infrastructure (like extortion and drugs), as compared to newer organizations. Thus, convergence may be an indicator of a terrorist group “ending” by transitioning to insurgency or devolving into another violence type (Cronin, 2011).

Both diversification and convergence are most common in states experiencing endemic conflict, with weak or nonexistent institutions. It may be more helpful to conceptualize convergence as the relationship moving from distinct organizations into interwoven networks, where individuals are characterized less by in-group identity and more by specific skill sets. One recent example of convergence is the Islamic State (IS). The size and scope of the Islamic State’s area of territorial control made it the wealthiest terrorist group in world history; the group controlled around 34,000 square miles (an area the size of Maine) and earned an estimated $2.9 billion annually, allowing it to be effectively self-sustaining (Brisard & Martinez, 2014; Carter Center Syria Project, 2019). IS earns its money through kidnap and ransom, protection money, forced taxation/extortion, oil smuggling, political corruption, and the seizure of existing banks and financial institutions in its area of control (Brisard & Martinez, 2014; Warrick, 2018). IS benefits from having a strong organizational structure and experience managing logistics and financial issues that make the group well suited to “converge.”

Enabling Conditions

Often the broader contexts that allow transnational crime and terrorism to flourish are underappreciated in both the academic literature and policy solutions. In part, this is due to scale—Where does one stop when assigning causality? Solving endemic poverty and exclusionary political systems would undoubtably stabilize vulnerable regions and sectors, but such initiatives are often outside the scope of the agencies tasked with disrupting crime-terror intersections. However, there are some variables that significantly increase potential vulnerabilities, expansions, or evolutions because of their enabling capacity and that should be included in any solution or analysis of crime-terror linkages. These include corruption, global illicit flows, state fragility, and lootable resources.

Corruption

Corruption—the misuse of public office through the giving or withholding of an advantage by a public official—facilitates a variety of disruptive activities, including transnational organized crime and terrorism (UNTOC, 2000). Corruption enables both profit and logistical support activities for illicit groups, even in geographic areas that are not operational targets. For terrorist groups, corruption can create a “policy window” through which they can position themselves as a legitimate alternative to existing institutions, a way to circumvent investigations or prosecutions, and an opportunity for kinetic attacks (Shelley, 2014). Purely criminal groups also benefit from corruption. This connection is more widely acknowledged; under the UNTOC for example, corruption is recognized as a key condition of transnational organized crime, and signatories to the accord must adopt domestic legislation criminalizing corruption (UNTOC, 2000). For groups that combine profit-motivated illicit activities with political disruption, corrupt officials and institutions are key enablers of their continued success.

Illicit Financial Flows

Illicit financial flows, defined as “money that is illegally earned, transferred, or utilized” (Issues: Illicit Financial Flows), inhibit a state’s ability to raise, retain, and invest domestic resources (Organisation for Economic Cooperation and Development [OECD] and United Nations Office on Drugs and Crime [UNODC], 2016). Examples of these kinds of flows include funds with criminal origins (such as the proceeds of a crime), funds with a criminal destination (such as bribery, terrorist financing, or conflict financing), commercial tax evasion, mis-invoicing of consumer goods, and the trafficking of humans or goods. Illicit flows are also transfers to, by, or for entities subject to financial sanctions under UN Security Council Resolutions and transfers that seek to evade anti–money laundering or counterterrorism financing measures (OECD and UNODC, 2016).2 Monies that should have been invested into local populations are diverted, bypassing currency controls, tax regulations, and law enforcement oversight. While illicit flows have a clear relationship with criminal groups, they also directly intersect with terrorist group capability: illicit flows gift terrorist groups with improved “freedom of action” and widen the scope of both tactical and strategic considerations (Comolli, 2018). Tracking and limiting illicit financial flows is challenging because they occur within the larger global financial system.

Fragile States

Fragile states are countries with low capacity and legitimacy, poor provision of public goods, weak institutions, uneven governance, and an anemic social contract between the state and citizen (Miraglia et al., 2012; USAID, 2005). Some are caught in cycles of internal violence and all experience high levels of criminality, making them vulnerable to penetration by illicit actors. Fragile states cannot project power throughout their whole territory, creating governance vacuums transnational organized crime and terrorist groups can exploit. Thus, fragile states act as safe havens and areas of cooperation, even for groups that are not permanently located there. They also serve the important function of logistical nodes that allow shipments of illicit goods to be “laundered” during their movement from origin to market country (Miraglia et al., 2012). Fragile states often are collocated with other enabling conditions such as corruption and lootable resources.

Lootable Resources

Beyond “traditional” illicit goods like firearms and people, terrorist and criminal groups also exploit natural resources. Lootable resources, or natural assets that are highly profitable and easy to sell, have been extensively linked to nonstate actor violence and civil conflicts (Cheng, 2018; Findley & Marineau, 2015; Fortna et al., 2018). They may even act as direct drivers for terrorist activity: Fortna et al. found that because such funding sources reduce the need for violent nonstate actors to rely on domestic populations for support, groups are more likely to turn to terrorism (2018). Examples of such goods include diamonds, timber, oil, and drugs. Lootable resources extend conflict duration, increase other enabling factors like corruption, and make it more likely that third-party states will intervene in the conflict (Fearon, 2004; Findley & Marineau, 2015). While entering the market for these goods is “easy” for illicit actors because of the high level of demand and unevenly regulated international marketplaces, it still requires criminal knowledge and capability, making lootable resources a major intersection point for transnational crime and terrorism.

Responding to Terrorism and Transnational Organized Crime

Responses to transnational crime and terrorism have historically been uneven, both geographically and politically. Most interventions have focused on the developing world and been executed through state and military actors. This pattern occurs because Global North countries generally prefer to disrupt illicit networks “over there,” without applying equivalent effort to their own role as facilitators, perpetrators, and markets. By externalizing the threat, and by consistently framing themselves as “markets” where problematic products and political activity are sent, they reduce the need to examine domestic policies and dynamics. However, demand is key, and responses must account for underlying and enabling conditions that allow crime-terror relationships to emerge and evolve.

There are some actionable steps both domestic governments and international institutions can pursue that would make the escalation of the relationship less successful. Any efforts to respond to terrorist-crime linkages must be a “whole government” approach that includes actors and departments that are not traditionally understood to have a counterterrorism mission because they have unique strengths and leverage over a multifaceted problem. Further, states can treat large terrorist groups with major financial assets like states by sanctioning linked businesses and pushing them out of the international monetary system. Terrorist groups are less successful at illicit activity than professional criminals, which provides an opportunity for interdiction and disruption (Irwin et al., 2012). Continued cooperation and government oversight of anti–money laundering efforts increases the likelihood that illicit financial activity would be detected. Effective, high-profile prosecution of corruption would also pay significant dividends by making the operational environment less hospitable to illicit actors.

Part of the policy challenge is that international law enforcement does not functionally exist. While there are many cooperative agreements between individual states, and WEIRD countries can pursue unilateral intervention in developing countries, sovereignty dictates there is no independent global police force. Investigation, prosecution, and disruption efforts are centered on the tails of the criminal-terrorist bell curve: high profile leaders like Pablo Escobar or Osama Bin Ladin, or on rank-and-file members who may have sought to traffic illicit arms across the Sahel or travel to join al-Nusra in Syria. The heart of the relationship, however, is the middle management of both group types. Challenging some of the precepts of Westphalian sovereignty by developing a more robust structure for international investigation and prosecution may be an effective response to disincentivizing crime-terror relationships. This would also help to mitigate the “safe haven” challenge of uneven state capabilities.

Disrupting trafficking routes serves to inhibit both operational and logistical aims of violent nonstate actors. States, professional bodies, and international organizations have the power to require consistent documentation requirements for goods, or at least the most abused commodities like precious minerals, oil, or timber. Another avenue of disruption is in the increased scrutiny of nonintuitive shipments, specifically a closer examination of goods being shipped by companies with no history or logical need to trade in such goods or using inappropriate methods of transport (Delston & Walls, 2009).

Looking Ahead

Both transnational criminals and terrorist networks are innovative, adaptive types of organizations, and it makes intuitive sense that they would pioneer new ways of circumventing obstacles. However, while the intersection may be inevitable, integration is not. Not all terrorist groups will have the opportunity or inclination to diversify or ally with transnational criminal networks. As proto-state actors seeking to demonstrate their “qualifications” as governance actors, some groups will eschew or even attack criminal groups. Others lack a criminal infrastructure in their area of operation to link up with; this is particularly true for areas characterized by illicit activities with low labor requirements. Finally, still others will determine that such associations would bring unnecessary scrutiny by domestic and international law enforcement. From the criminal side, many of the same logics apply: some transnational criminal groups avoid significant or lasting relationships with terrorist groups because of concerns regarding official scrutiny. Others may be engaged in breaking domestic and international laws but have strong political preferences or affiliations and do not want the existing government overthrown (Hutchinson & O’Malley, 2007). A desire for governmental stability may also be a function of logistical concerns—if you have already bought the judge (or customs officials, border guards, prison staff, etc.), shooting them is counterproductive and bad business.

To effectively develop workable solutions, policymakers, academics, and law enforcement must confront the reality that globalization is not an unmitigated good. Greater international integration, increased technology, and the dramatically increased flows of goods and people makes everything move more easily, which includes criminality and political violence. WEIRD countries must acknowledge their role as demand markets and financial havens that “pull” illicit flows of criminal funds and goods out of the developing world, creating an unintentional revenue stream for violent nonstate actors.

As avenues for terrorism financing continue to constrict and state governments in the developing world gain capacity, intersections between transnational criminal groups and terrorist organizations will persist. Those interested in disruption need to think long and hard about how to address the challenges of sovereignty in a world that currently (and necessarily) extends the protections of borders to actors who circumvent them with ease.

Further Reading

References

Notes

  • 1. WEIRD stands for Western, Educated, Industrial, Rich, and Democratic states and has been suggested as an alternative to problematic terms like “First World” or “developed,” which suggest some countries are more evolved or have reached a completed stage, rather than remaining dynamic entities.

  • 2. It is important to note that illicit flows are distinct from informal flows, which include legitimate international monetary transfers (usually remittances from workers abroad to families at home) which may not transit through a formal bank (Reed & Fontana, 2011). Informal flows can be made illicit, however, by the involvement of terrorist or criminal actors. For example, one of the ways ISIS both makes and integrates money is by transforming informal flows into illicit flows. The group reportedly manages millions of dollars in hawala transactions every week (Kenner, 2019). In the case of ISIS, participation in hawala allows it to circumvent international sanctions, Syria’s collapsed formal banking industry, and external scrutiny, in addition to serving as a revenue stream.