SERIOUS AND ORGANISED CRIME Jane's Intelligence Review - November 01, 2007 Date Posted: 17-Oct-2007 Passive aggressive - Sweden combats organised crime Key Points Although not renowned for organised crime, several recent large drug seizures indicate that Sweden is increasingly being used as a transit country for drug trafficking, including cocaine. Smuggling and trafficking of humans to Sweden is also prevalent, with recent police operations targeting prostitution rings. State responses are increasingly robust, but the market dynamics of the industry will likely fuel further criminal activity. This article was first available online at jir.janes.com on 17 October 2007. Organised crime is on the rise in Sweden. Much of the criminality has regional and/or international connections reflecting Sweden's situation as a transit country as well as a destination. Michael Jonsson and Rikard Jalkebro outline prominent trends and state responses. Sweden has historically been comparatively free from serious organised crime. However, over the past decade there has been a significant increase in market-based organised crime, much of which is connected to regional and/or international organised crime groups. For example, narcotics trafficking in Sweden has significantly increased in recent years, with the number of reported cases growing by 21 per cent in 2006, according to the Swedish National Council for Crime Prevention. Internet-based financial crimes have also increased dramatically, from 10 successful attacks against banks in 2005 to almost 300 in 2006, according to the Swedish Financial Supervisory Agency. The Swedish Central Bank estimates the 'shadow economy' in Sweden has grown from 3.8 per cent to 6.5 per cent of the gross domestic product from 1990 to 2004. Although the precision of the numbers is debatable given the inherent difficulty of calculating clandestine activities, the fact that the estimate, building on the same method, has almost doubled is highly significant. In response, the Swedish authorities have grown increasingly aggressive, partly driven by the tendency among organised crime groups to threaten or harass individual law enforcement officials. The state has pursued tactics such as targeting the 149 most prominent organised crime figures, criminalising trafficking, and increasingly focusing on follow-the-money tactics. So far, these tactics have showed some progress against specific actors and some categories of crime. For example, the number of reported cases of trafficking for sexual purposes and procurement both decreased in 2006 compared to 2005. However, the Swedish police are voicing concerns that a new violent confrontation between motorcycle gang-related groups might be under way, as some members of the emerging group Outlaws, largely made up of ex-convicts, is increasingly challenging the status quo established by some Hells Angels and Bandidos gangs. The long-term effects of the state response to organised crime therefore remain to be seen.
Narcotics trafficking Of the current changes in organised crime trends, the increase in narcotics trafficking and use is perhaps the most pronounced and of most concern to the authorities. Official data indicates a steep increase in availability and abuse of drugs in Sweden for the past 15 years, although the percentage of young people trying narcotics has decreased since 2000. Prices have almost halved since the 1980s, with the main drugs being cannabis, amphetamines, heroin and cocaine. The police believe there are more than 120 different networks that deal with cannabis trafficking alone. Drug seizures made by customs officials have also more than doubled since the 1980s and in 2006 the Swedish Customs Service made record seizures of narcotics. The amount of cocaine seized has markedly increased, with seizures averaging 30 kg a year from 2002 to 2005, followed by an increase to 1,350 kg in 2006. In 2006 and 2007, two major seizures of cocaine, of 1,100 kg and 200 kg, have been made in Sweden's second largest city Gothenburg, raising suspicions this city in western Sweden has become an entry point into the EU for cocaine. The larger shipment was seized in December 2006, originated in Venezuela and was intended for Poland, whereas the smaller consignment, seized in March, came from Peru and is suspected to have been headed for Düsseldorf in Germany. In conjunction with these seizures, Ingela Östmark, the deputy director of the Swedish Customs Service, expressed suspicions that Sweden is increasingly being used as a transit country. A June report from the Swedish Police based on the National Cannabis Project between 2004 and 2006 indicates that the amount of cannabis in circulation may be more than 10 times higher than previously estimated. Another recent trend is an increase of drug dealing based on the internet and distributed using the ordinary post system. Seizures of this kind have increased significantly from 776 in 2004 to 1,280 in 2006 and 920 during the first six months of 2007. This type of drug trade is predominantly carried out by young people and the Swedish police are planning on appointing a special unit to address this particular problem. The groups primarily responsible for the drugs trade are motorcycle gang-related organised crime groups and ethnically based groups from, for example, the western Balkans and Baltic states. There have even been cases where these groups co-operated. In 2004, a police operation against a Bandidos gang resulted in Lithuanian men being arrested on drug charges. The Lithuanian organisation transported the drugs to Sweden and people belonging to Bandidos sold it. Eight people were convicted in the case for between two and 10 years in prison. This new form of co-operation between criminal networks with differing backgrounds and skills has also facilitated groups becoming involved in new sorts of crime and becoming increasingly 'multicriminal'. Human trafficking In addition to narcotics, human trafficking also seems to be prevalent in Sweden and a few largescale operations have been rolled up during the past few years. One major case that was partially solved in 2006 involved more than100 Chinese children that arrived in Sweden individually or in small groups, applied for asylum and later disappeared from the housing where they were awaiting the outcome of their asylum processes. The children came to Sweden without parents, passports or apparent reasons to seek asylum. According to Swedish law, people under the age of 18 cannot be imprisoned and they cannot be deported unless there is an established connection with either relatives or an orphanage. A
Chinese couple was convicted for human smuggling in this case to two years imprisonment each, but as the final destination and fate of the children is largely unknown, charges of trafficking could not be upheld. Four children who were apprehended while in transit said they believed the final destination was either France or Italy. Apart from this group, very few of the 'disappeared' children have been found, which suggests Sweden was an entry point to the EU and not the final destination for the children. A major human trafficking operation of more than 500 Vietnamese was also reported as being disrupted by the police in Halmstad in southwestern Sweden in July. Pro forma marriages and trafficking of children who are falsely presented as the children of Vietnamese immigrants that have already obtained the right to stay in Sweden were allegedly methods of choice for this group, although the investigations are ongoing. In late 2006, some 100 suspected pro forma marriages, primarily involving Swedish women paid between EUR6,000 (USD8,532) and EUR16,000 (USD23,000) to marry Indian and Pakistani men were discovered. Pro forma marriages have become prevalent in Sweden because of lax requirements related to marrying, partly as a result of changes adopted in April 2006 to make Swedish laws more compatible with EU directives. Since 2006, three major prostitution procurement rings have been exposed in and around Sweden's three biggest cities. Women from Eastern European countries such as Estonia, Russia, Romania, the Czech Republic and Slovakia have been sold and used as sex slaves and prostitutes in brothels and on the streets. The heads of these trafficking operations mainly originated from Eastern Europe as well. In one of these cases, involving brothels in and around Stockholm, an Estonian man was found to be the head of the ring, making this his third prosecution on trafficking charges in Sweden. The man was sentenced to one year's imprisonment and 10 years' expulsion from Sweden in July. This indicates that some perpetrators are repeating their crimes and, according to the Swedish police, learning more about the Swedish system and adapting their methods accordingly. A general trend in such trafficking in recent years, not just in Sweden, is that it has been transferred to the internet and the booking is done through mobile telephones and text messages. The link between perpetrator and victim becomes more distant and vague, making it more difficult to gather evidence. Earlier investigations of trafficking for sexual exploitation purposes carried out by Dr Anna Jonsson at Uppsala University claimed the typical trafficking victim was very young (often under 18), originated from the Baltic states or other countries in Eastern Europe and was often duped or forced into prostitution. Those in charge of the trafficking typically made significant profits and were often only convicted of procurement, not trafficking, resulting in convictions ranging from one to four years' imprisonment. More recently, Sweden has also become a transit country for Nigerian women travelling to Norway for prostitution purposes. Between 2004 and 2006, 51 police operations against organised crime involved in human trafficking were made in Stockholm alone. A new project for joint action against human trafficking was launched in early 2007, when more money was granted for the police, prosecutor and the Swedish migration board. Financial crimes Over the past two years, there has also been a sharp increase in the number of internet-based financial crimes, much of which seems to be connected to the Baltic countries, Russia and other former Soviet Union countries. The number of successful attacks against banks via the internet increased from 10 in 2005 to almost 300 in 2006. However, a large proportion of these attacks were related to a single bank, most probably carried out by the same group of perpetrators. More than 160 people are currently facing charges of money laundering in Sweden in relation to this
case, although the alleged masterminds of the crime remain beyond the reach of the Swedish law enforcement agencies. According to the Swedish Financial Supervisory Agency, the attacks have been fairly unsophisticated so far, but both their frequency and sophistication is expected to increase. A further sector vulnerable to financial crime is money exchange facilities. Similar to many other countries, a majority of bureaux de change in Sweden have not fulfilled their requirements to provide suspicious transaction reports. Swedish anti-money laundering regulations have been frequently criticised, including by the Swedish Financial Police itself, but new laws are currently being drafted and should be adopted before the end of 2007. Nonetheless, a high-profile case was broken in March, when an exchange bureau, Wexex, was closed down in Stockholm after being suspected of large-scale money laundering operations, allegedly related both to criminal gangs and real estate companies evading taxes in Stockholm. At the police raid, a list of 111 names was found of people whom allegedly regularly collected a large amount of cash from the bureau de change. Sixty of these customers had previously been convicted of serious crimes such as drug trafficking, robberies and economic crimes. The Swedish Financial Supervisory Agency suspects that the bureau de change handled around USD50 million between 2005 and 2006. Five people were convicted to sentences ranging from one year and eight months' to four years' imprisonment in July, for offences ranging from tax fraud to false invoicing; in relation to funds totalling USD4 million. According to the Swedish Financial Police annual report, only eight out of 34 of the Swedish bureaux de change provided any kind of suspicious transaction reports in 2006 and more than 99 per cent of this reporting comes from two of these companies, suggesting that this remains a high-risk sector for money laundering in Sweden. An extensive investigation published in April by the Swedish National Council for Crime Prevention into how actors in the drug trade in Sweden deal with the economic aspects of their criminality found that credits often created significant risks for these actors and that the net profits were typically fairly low and quickly spent. On the one hand, the report argues that costs for maintaining security are higher than is often assumed. Security costs, losses due to customs seizures, thefts or mistakes in handling the narcotics and an often extravagant lifestyle, as well as frequent substance abuse among members lower down the retail chain, together mean that comparatively few actors do well out of drug trafficking. A combination of the frequent need for credits, the lack of reliable and low-cost 'credit rating' and 'contract enforcement' and the unreliable nature of the typical actor in the narcotics industry also mean that the credit system frequently is a source of considerable concern to many drug traffickers. On the other hand, among criminals involved in drug trafficking to Sweden, there is a general perception that actual money laundering is seldom needed, because the actors do not make enough money, spend it too quickly and because Swedish law enforcement agencies have traditionally not put much energy into following the actual financial flows connected to the drug trade. State responses Given these increases in the prevalence of organised crime, it is unsurprising that the Swedish state has become increasingly aggressive in targeting organised crime in the past five years, driven partly by an increased political awareness of the problem as well as by an increasing tendency among organised crime groups to use intimidation and violence against both law enforcement officials and witnesses. The responses have included legislative amendments, organisational changes, increasing budgets and the adoption of specific tactics.
Swedish laws, which traditionally have been strong on protecting civil rights and limiting the methods allowed to law enforcement agencies, have often been cited as problematic in terms of combating organised crime. The Swedish police have, for example, not been allowed to engage in crime provocation, such as undercover officers offering to buy drugs. However, a 2007 study by Dr Jonsson points out that recent changes have improved the capacity of the Swedish Police to co-operate internationally, by strengthening the possibility to create fictitious identities for undercover officers in 2005 and regulating the use of 'controlled deliveries' (letting a known drug shipment pass through a country to the end destination to be able to apprehend the receiver as well as the courier). Other important legislative changes have included criminalising human trafficking in 2002 and expanding the crime beyond prostitution purposes in 2004. The Swedish law against prostitution, which criminalises the buyer, also seems to have limited the trafficking for prostitution purposes to Sweden, as illustrated by the Nigerian prostitutes using Sweden as a transit country but not remaining in the country. Nonetheless, the right of an arrested person to review evidence against him or her while parallel investigations are still under way, seems likely to remain problematic in the future. The main effort against organised crime in Sweden has been the NOVA project. Initialised in 2003 in Stockholm, the project built on the idea of closely monitoring 149 prominent actors within organised crime groups in Sweden and co-ordinating efforts within different branches of the police force. The initial aim was to decrease organised crime by 30 per cent in two years by targeting prominent figures that were seen as role models by young people at risk of recruitment. Whereas the initial project may not have been a complete success, the police have been satisfied with the methods developed and the project was renewed in the two-year NOVA II project in 2006. NOVA II draws partly on the idea of zero-tolerance and uses Swedish legislation that allows the police to search people and cars for weapons without prior evidence. These searches led to 350 crimes being reported between January and May, of which approximately half were minor drug offences, eight were major drug offences and five were robberies or planned robberies. However, more importantly, the frequent searches put criminals on the defensive and makes planning of more large-scale criminality significantly harder. During the past two years, there has also been an increased focus on using asset forfeiture and follow-the-money methods. Since 2006, local intelligence centres have been created in the three major urban centres, where the Swedish Tax Agency, the National Economic Crimes Bureau and the Customs Agency co-operate in order to utilise economic tools to target prominent organised crime figures. In January, a national assets seizure unit was created and the Swedish anti-money laundering regulation, which has been roundly criticised both in peer evaluations and by the Financial Police itself, is currently being re-drafted, while the Financial Supervisory Agency have received expanded resources to combat money laundering. CONCLUSION Given the rising crime figures, but also the increasingly robust state responses, trends in combating organised crime in Sweden show mixed results. There are clear signs of jurisdictional arbitrage (organised crime groups moving its activities from one country to another owing to more favourable laws) going in both directions in northern Europe. Swedish laws against prostitution seem to have limited the extent of trafficking for prostitution purposes to the country, although the country also appears to have been used as an entry point into the EU for other kinds of trafficking, both owing to lack of regulations against pro forma marriages and the jurisdictional idiosyncrasies used by the Chinese trafficking network. The explosive growth in seizures of cocaine indicates that Sweden has also increasingly been used as an entry point into the EU in this regard, but it also seems possible that recent seizures may lead to a change of routes. Sweden has several advantages in fighting serious organised crime. The state is strong and comparatively efficient, societal acceptance of organised crime is extremely limited, and trust and co-operation among Scandinavian countries is very strong. Nonetheless, given the strong market forces driving drug and human trafficking, police successes risk becoming transient, as new networks arise to fill the vacuum created when the police manage to dismantle a specific network. Consequently, while the Swedish police have recently made some progress against organised crime, the long-term results remain to be seen.
RELATED ARTICLES 1. Money problems - Tackling terrorist financiers in Sweden 2. Going west - Baltic crime groups expand and diversify 3. Security/Sweden Author Michael Jonsson is a researcher at the Silk Road Studies program and Rikard Jalkebro is a PhD student at St Andrews University. Search for these articles at www.janes.com Increased in narcotics trafficking is of most concerns for the authorities. (PA Photos) 1041850 2007 Jane's Information Group