Stefano Betti

When UNTOC can’t deliver, could trade-related measures be applied to curb state-run organized crime?

Like all criminal-justice treaties, UNTOC is founded on the assumption that it is possible to draw a line between state officials in charge of fighting crime and the members of criminal networks. Although it is an established fact that criminal elements often infiltrate public institutions, the underlying expectations are that, to a significant extent, the good apples can be separated from the bad and that state bodies have an inherent interest in containing organized crime. This all sounds neat and reassuring, but does it reflect reality?

While the cases of North Korea and Guinea-Bissau are emblematic and well-known expressions of the entangled nature of state and criminal elements, several other countries are quickly being added to the list. For example, in a New York Times article published on 15 July 2018, Jeremy McDermott argues of Venezuela that the country ‘cannot work to contain organized crime, as the very security forces that should be deployed against it run much of the business,’ adding that ‘Mr. Maduro [president of Venezuela], even if he wanted to, could not cut out the cancer of corruption and organized crime, as these are the very elements that keep him in power.’

As the implementation of UNTOC is entirely dependent on measures taken by its parties, what are the chances that this convention will bring about change, however limited, in these countries? How can we reasonably expect UNTOC to be implemented by those very individuals whose personal interests and ambitions (as well as those of related clans, families and affiliates) run counter to the convention’s objectives?

The fact is that UNTOC has no built-in incentives for compliance. Consider its dispute-settlement mechanism. If a state fails to comply with one of the treaty’s provisions (refusing to provide mutual legal assistance on grounds of banking confidentiality, for example), the aggrieved state can set in motion a procedure that might result in the case being elevated to the International Court of Justice (ICJ). In practice, however, the mechanism relies on the goodwill of the two parties to reach a negotiated agreement. And even if a dispute were eventually adjudicated, how likely is it that an ICJ judgment would be complied with in the absence of any globally enforceable coercive mechanism?

Arguably, a review mechanism for UNTOC would hardly create any stronger incentive. Such a mechanism would presumably be created along the lines of the one established for the UN Convention against Corruption (UNCAC) and would almost certainly show a lack of appetite for finger-pointing. Instead, emphasis would most likely be placed on consensual dealings to avoid, crucially, any embarrassment for the countries under review.

What to do, then, in a world where the line drawn between good-intentioned state authorities and the criminal underworld is getting thinner and thinner (if not disappearing altogether) in a growing number of countries that are party to UNTOC?

I am not suggesting that UNTOC has become irrelevant; indeed, it is still very much relevant. Rather, what I am arguing is that UNTOC can only work in situations where parties are receptive to its provisions. And countries are receptive when their institutions that deal with criminal-justice issues possess a minimum of integrity and independence, when political elites are not inextricably linked to criminal networks and the freedom of the press has not been annihilated.


New mechanisms needed

Instead, countries that we can broadly categorize as mafia states are increasingly highlighting the inadequacy of classical criminal-justice treaties. Other mechanisms then need to be brought into the picture. Trade policies may offer potentially interesting and, so far, little-explored avenues. Indeed, access to supply chains is something to which all countries attach particular value, no matter how corrupt and embroiled in crime their political elites. So, the question is: can the pressure stemming from trade-based mechanisms, notably in the form of the threat of market losses, be leveraged against state-run organized crime?

Over the years, the World Trade Organization (WTO) has pursued its goal to promote free and open trade by ensuring that countries eliminate trade barriers. At the same time, WTO legal regimes include so-called safety valves. For example, countries can invoke what is known as a public-morals exception to justify applying trade-restrictive measures (such as imposing tariffs) against another country. Significantly, WTO dispute-settlement bodies have acknowledged that the notion of public morals may well lead countries to restrict trade in order to counter organized crime, fraud and money laundering. In practice, the WTO has held countries to a strict standard so far in assessing whether such measures are necessary and non-discriminatory, thus limiting the practical effect of using the public-morals exception in relation to organized-crime or money-laundering allegations. But the potential is there for the safety valves to be used to curb access to global markets by those countries that display the most blatant cases of state-run criminality. The urgent need to tackle transnational organized crime, as a global security challenge with links to illicit trade, calls for the WTO to start a frank and open discussion on how its near-universal legal frameworks can be leveraged in support of this fight.

Political conditionality may offer another relevant mechanism. Normally, EU trade agreements contain provisions allowing for the suspension of benefits in case the trading partner does not conform to certain standards related to human rights and good governance. One example is the Cotonou Agreement, signed by the EU and the ACP countries (African, Caribbean and Pacific Group of States) in 2000.

The US takes a different approach. Its African Growth and Opportunity Act directly links enhanced access to US markets to improvements in the field of human rights, the rule of law, anti-corruption, etc. Beneficiary status may be granted and withdrawn at the discretion of the US president. The use of political conditionality has so far had mixed results. Critics frequently emphasize its inconsistent application and weak enforcement. This is not, however, a reason for abandoning the idea. Rather, it should be a stimulus for exploring how trade agreements can be given more clout, including how a country’s response to organized crime can feature as a factor against which progress, stagnation or deterioration can be assessed and trade benefits accrued, maintained or diminished accordingly. New concepts such as the Vulnerability Index, which is being developed by the Global Initiative in the context of its ENACT project, might one day offer the conceptual platform to carry out such assessments in the context of trade agreements. The index aims to provide a multidimensional measure of organized crime and its impact in Africa.

The time seems ripe to explore, in a more systematic and focused way than has been the case so far, how trade laws, agreements and policies can support the fight against organized crime, particularly when traditional criminal-justice treaties, including UNTOC, are beginning to reveal their structural limits.