Transnational Organized Crime: Principal Threats and U.S. Responses
Released: 2006-03-20T00:00:00

Background

Starting in the 1990s with the end of the Cold War and the advent of globalization, manycriminal organizations ramped up their operations and expanded them worldwide. Theseorganizations are believed to have been helped by weakening government institutions in somecountries, more open borders, and the resurgence of ethnic and regional conflicts across the formerSoviet Union and many other regions. Crime networks have exploited expanding trade and financialmarkets, while benefitting from rapidly advancing technology, broadened international travel, andimproved global communications. Mainly due to its clandestine nature, international crime is hardto measure. By the most conservative estimates, criminal proceeds (1) comprise between two and fivepercent of global gross domestic product (GDP). (2)

Transnational organized crime tends to develop in nations where law enforcement institutionsare weak and citizens have limited economic alternatives. Farmers frequently turn to drugcultivation, boosting the international narcotics trade. Unemployed citizens seek work abroad andfall victim to people-trafficking rings. Across the globe, government corruption and illicit trade fueland sustain each other. Transnational crime is believed to most frequently originate in regions suchas sub-Saharan Africa, the former Soviet Union, Latin America, and the Caribbean, but its effectsare global. Many experts maintain that terrorists are increasingly funding themselves through crime. They have been linked with criminal groups in money laundering, counterfeiting, and other activities. Collaboration between the two groups could heighten threats to the United States and its interests.

Definitions

There is no single accepted definition of transnational organized crime. In 1994, researchersdefined "transnational crime" to include offences whose inception, prevention, and/or direct orindirect effects involve more than one country. (3) Experts believe transnational organized crime networks varyconsiderably in structure, strength, size, geographical range, and the scope and diversity of theiroperations. The United Nations sought a suitably broad definition in its Convention againstTransnational Organized Crime, to which the United States became a party in December 2005. According to the U.N., organized crime groups consist of "three or more persons, existing for aperiod of time and acting in concert with the aim of committing one or more serious crimes oroffenses ... in order to obtain, directly or indirectly, a financial or other material benefit." (4)

Traditional vs. Modern Networks. Definitionsof transnational organized crime often differentiate between traditional crime organizations and moremodern criminal networks. Traditional groups have a hierarchical structure that operatescontinuously or for an extended period. Newer networks, in contrast, are seen as having a moredecentralized, often cell-like structure. Some experts also distinguish groups by their relation to thestate. Many conventional organizations have interests that are aligned with countries; they dependon the state for contracts and services. (5) They may have repeatedly laundered their assets through legitimatebusinesses. Modern networks, in contrast, are seen as less likely to profit from state contracts orlaunder large sums of money. They often thrive on the absence of effective governance.

Organized crime can involve top officials. For example, Vladimiro Montesinos, head ofPeru's national intelligence and anti-narcotics efforts between 1990 and 2000, is now imprisoned,charged with running major international drug, weapons, and money laundering operations. (6) In addition, some states, suchas North Korea, are accused of participating in organized crime as a matter of state policy. (7)

Organized Crime vs. Terrorism. Definitions oforganized crime and terrorism sometimes overlap. Both groups frequently operate in decentralizedcell structures, tend to target civilians, and use similar tactics such as kidnapping and drug dealing. Many experts distinguish the groups by motive: criminals are driven by financial gain and terroristsby political, sometimes religious goals. But clearly discerning groups' motives can be challenging. Terrorists are increasingly seen as supporting themselves through criminal activity. (8) Funding for the March 2003Madrid train attacks, for instance, came from drug dealing. (9) Some crime bosses also appear to dabble in terror. TheDubai-based Indian mobster Aftab Ansari, for example, is believed to have helped fund theSeptember 11 attacks with ransom money earned from kidnapping. (10) Further, definitions mergebecause a growing number of extremists may feel justified in committing the criminal activitiesthemselves, on the grounds that such acts square with their ultimate "terrorist" aims. (11)

Narco-Terrorism. Some 17 of the 41 StateDepartment-designated foreign terrorist organizations engage in "narco-terrorism," according to theDrug Enforcement Agency (DEA). (12) Many experts believe the term "narcoterrorism" was first usedby former Peruvian President BelaÃºnde Terry in the early 1980s to describe terrorist-like tactics usedagainst Peruvian law enforcement by Shining Path Marxist rebels. While narco-terrorism has noformal definition, it is generally used to describe activities by groups that use drug trafficking to fundterrorism. For the DEA, it is "a subset of terrorism," in which groups or individuals participatedirectly or indirectly in the "cultivation, manufacture, transportation, or distribution of controlledsubstances and the money derived from these activities." (13)

Some consider the term too broad. By various definitions, narco-terrorism could be appliedto a wide range of groups, ranging from guerrilla organizations such as the Revolutionary ArmedForces of Colombia (FARC), which earns hundreds of millions of dollars annually from cocaine, tosmall, fledgling terrorist cells. Some claim the term's use may occasionally reflect political motives.

Threats to the United States

Mainly because it is clandestine, transnational crime is hard to measure. The U.S.government's International Crime Threat Assessment, (14) completed in 2000, gauges various global criminal activities andwas drafted by an interagency working group led by the National Security Council (NSC). Basedon this assessment, which is currently under review by the NSC, (15) and other more recentreports, the largest international crime threats, in terms of their potential impact, include (1)smuggling of nuclear materials and technology; (2) drug trafficking; (3) trafficking in persons; (4)intellectual property crimes; and (5) money laundering.

Many experts fear organized criminals will help terrorists or nation statesacquire weapons of mass destruction (WMD). Among WMD threats, (16) many experts believe themost menacing is that terrorists could develop and use a nuclear bomb. (17) In regions such as theformer Soviet Union, the security of nuclear material has been criticized as lax. The StateDepartment, to allay concerns that former Soviet scientists could be bribed by criminal networks,runs nonweapons-related projects in Russia and Ukraine to keep them employed. The risk ofnuclear smuggling was highlighted in October 2003 when officials in international intelligence andlaw enforcement discovered that Pakistani nuclear scientist A.Q. Khan was selling nucleartechnology to North Korea, Libya, and other unknown parties. (18) In one scenario, a nuclearattack on a U.S. city could kill more than half a million people and cause more than $1 trillion indamage. (19)

Every year illegal drugs kill about 17,000 Americans. (20) Illicit drugs are estimatedto impose about $160 billion in social and economic costs and $67 billion in direct costs to theUnited States annually. (21) The illicit drug trade is believed to be valued at between $500and $900 billion worldwide. Analysts identify cocaine and heroin trafficking as the most profitablecriminal activity for transnational groups.

Trafficking in persons for sexual exploitation or forced labor is one oforganized crime's largest revenue sources, generating $9.5 billion annually, according to the FBI. An estimated 600,000 to 800,000 people are trafficked across international borders annually. Whencombined with domestic trafficking, the total is believed to be between two and four million. (22) About 14,500 to 17,500people are thought to be trafficked into the United States annually, (23) mainly from SoutheastAsia and the former Soviet Union. In principle, the term "human smuggling" is distinct from"trafficking in persons." In human smuggling, migrants pay to cross international borders. Expertsfear human smugglers may help terrorists enter the United States and other countries. (24)

IP violations are thought to distort international trade and cause extensiverevenue losses to legitimate industries. According to Interpol, trade in counterfeit goods has growneight times faster than legitimate trade since the early 1990s. (25) U.S. businesses estimatethat counterfeiting costs them between $200 and $250 billion per year in lost sales. (26) In China, industryestimates place piracy levels in many sectors at about 90 percent. (27)

Many criminal organizations hide the traces of their illegal activities by directlyand indirectly investing their profits in legitimate financial institutions. (28) In bulk cash smuggling,criminals place their profits in jurisdictions with lax financial regulations and law enforcement. Byhighly conservative estimates, money laundering is valued at two to five percent of world GDP. (29)

U.S. Policy Response

Framework

The International Crime Control Strategy (ICCS), released in June 1998, has framed relatedpolicies of both the Clinton and Bush Administrations. (30) It was created by multiple agencies, led by the National SecurityCouncil, in response to Presidential Decision Directive 42 (PDD-42), issued in October 1995.

It consists of eight broad goals, (31) and is intended to complement, not supplant, a variety of relateddocuments such as the National Drug Control and National Security Strategies. It aims to assist in"integrating all facets of the federal response to international crime." To assist in policy coordinationand other initiatives related to transnational crime, a Policy Coordination Committee (PCC) (32) was established within theNational Security Council (NSC) in April 2001. The PCC is currently discussing whether to producean updated crime strategy. A significant question is whether federal agencies are adequatelyintegrating efforts -- such as those relating to international crime and terrorism -- on their own. (33)

Key Federal Programs and Initiatives

A host of federal agencies, frequently in coordination, run programs to fight transnationalorganized crime. Leading agencies include the Departments of Justice, State, Treasury, HomelandSecurity, Defense, and Commerce. Many programs involve foreign cooperation. Below aredescriptions of programs and initiatives to combat five principal transnational crime areas. Agencyroles are expanded upon in this report's appendix.

Nuclear Smuggling. The U.S. response to nuclearsmuggling is often termed a "layered defense." It aims to stop nuclear material moving toward U.S.borders at a number of steps along the way. While anti-smuggling efforts are primarily led by theState Department, agencies including the Departments of Defense, Energy, Homeland Security, andCommerce play crucial roles. (34)

The State and Defense Departments lead coordination of the Proliferation Security Initiative. Announced by President Bush in May 2003, it creates international agreements and partnerships topermit the United States and its allies to search planes and ships suspected of carrying nuclearmaterial or technologies. The DOD-managed Cooperative Threat Reduction program works todestroy nuclear weapons, especially in the former Soviet Union. The State Department also managesthe International Science and Technology Centers in Russia and Ukraine to help employ scientistswith nonweapons-related projects. In addition, DOE's International Materials Protection, Control,and Accounting program secures nuclear material through activities such as upgrading security atnuclear sites, consolidating material into more secure locations, and improving nuclear smugglingdetection capabilities at borders.

The President's FY2007 budget requests about $1.12 billion for U.S. programs that providenonproliferation and threat reduction assistance to Russia and other former Soviet states; $1.02billion was appropriated for such programs in FY2006. The FY2007 request includes $372.1 millionfor DOD's Cooperative Threat Reduction programs, down from $415.5 million in FY2006. It alsoincludes $675 million for Energy Department WMD threat-reduction efforts and $75 million forcomparable State Department funding, up from $530 million and $71 million, respectively, inFY2006. (35)

Drug Trafficking. The State Department's Bureauof International Narcotics and Law Enforcement Affairs (INL) advises the President, Secretary ofState, other bureaus in the Department of State, as well as other departments and agencies of the U.S.government on programs and policies to combat international narcotics and crime. Other agencies,including the Departments of Justice, Homeland Security, and Defense, have a role in coordinatingU.S. anti-drug programs and initiatives. U.S. counternarcotics efforts abroad center primarily onforeign crop eradication and global narcotics interdiction. The State Department and other agencieshelp eradicate crops by providing foreign countries with equipment and supplies.

INL also manages the Andean Counterdrug Initiative (ACI), the primary U.S. programsupporting counternarcotics and economic development in the Andean region. ACI funding fromFY2000 through FY2004 totals about $3.5 billion. (36) Congress appropriated $731 million for ACI in FY2005 and$734.5 million in FY2006. The White House's FY2007 request is for $721.5 million.

Drug Enforcement Agency (DEA) and other Justice Department officials play a central rolein bringing smugglers to face justice in the United States through extradition, a significant judicialtool in combating narcotics. DEA agents also cooperate with 58 foreign governments in activitiessuch as bilateral investigations, institution building, and training. (37)

Trafficking in Persons. Interagencyanti-trafficking efforts are led by the State Department. Other agencies, including the Departmentsof Justice, Homeland Security, Health and Human Services, and Labor, also play key roles. (38)

The Victims of Trafficking and Violence Protection Act of 2000 ( P.L. 106-386 ), signed intolaw October 28, 2000, contains a number of key anti-trafficking provisions. One establishes anannual State Department Trafficking in Persons Report . First issued in July 2001, it reviewsanti-trafficking trends and rates countries' anti-trafficking efforts. The act also authorizes thePresident to impose sanctions, under the International Emergency Economic Powers Act ( P.L.95-223 ), against countries that do not meet anti-trafficking "minimum standards." (39)

On January 10, 2006, the President signed the Trafficking Victims Protection ReauthorizationAct of 2005 ( P.L. 109-164 ). Among other things, the bill aims to assist foreign trafficking victimsin the United States, address the needs of child victims, and develop anti-trafficking programs inpost-conflict situations and foreign humanitarian emergencies. It authorizes $188 million in 2006and $173 million in 2007 to combat human trafficking.

Intellectual Property (IP) Crimes. The Office ofthe United States Trade Representative (USTR) leads other agencies, including the Departments ofCommerce, State, Justice, and Homeland Security, in combating IP violations.

A centerpiece of U.S. efforts to strengthen intellectual property enforcement is the annualUSTR-led "Special 301" process, (40) which seeks to identify countries lacking adequate intellectualproperty protection. USTR also manages several tariff preference programs, such as the GeneralizedSystem of Preferences. (41) Many U.S. anti-piracy initiatives involve forging internationalagreements, often through the World Trade Organization (WTO). Through the WTO, the USTR caninitiate dispute settlement proceedings against foreign governments and institutions; a stringentWTO membership application process also promotes tougher IP laws.

Money Laundering. U.S. anti-money launderingefforts are led by the Treasury Department. Other key agencies include the Departments of Justiceand Homeland Security.

The Treasury's Office of Terrorism and Financial Intelligence (TFI) and its subsidiary bureaussafeguard domestic and foreign financial systems through financial sanctions, financial regulationand supervision, international initiatives, private sector outreach, law enforcement support, and othermethods. TFI and Treasury bureaus such as the Financial Crimes Enforcement Network (FinCEN)support U.S. law enforcement agencies in international financial crime investigations and provideU.S. policymakers with global money laundering analyses. FinCEN and other Treasury affiliatescooperate with 32 foreign government institutions to improve international money launderingstandards through the Financial Action Task Force (FATF). At the Justice Department, the AssetForfeiture and Money Laundering Section guides other agencies on money laundering-relatedinvestigations and prosecutions.

Criminal Investigations

The Departments of Justice and Homeland Security lead a handful of agencies intransnational crime investigations.

Domestic. Within the Justice Department, theCriminal Division's Organized Crime and Racketeering Section (OCRS) provides prosecutors to theCrime Strike Force Units of the U.S. Attorneys' Offices, which supervise investigations andprosecutions of transnational organized criminal groups. (42) OCRS prosecutors work with U.S. and foreign law enforcementagencies to facilitate the necessary flow of information and evidence among these agencies, and tocounsel U.S. agents on timing and strategy issues. The FBI Organized Crime program places SpecialAgents in domestic field offices to investigate criminal organizations within their jurisdiction. Jointtask forces composed of federal, state, and local law enforcement officials allow the FBI to pooladditional resources to combat organized crime. (43)

The U.S. Immigration and Customs Enforcement (ICE) is the Department of HomelandSecurity's largest investigative bureau. Within ICE, the Office of Investigations has a mission ofinvestigating crimes including alien smuggling, narcotics and contraband smuggling, and financialcrimes. (44) The FinancialInvestigations Division focuses on financial crime; the Smuggling/Trafficking Branch disrupts andprosecutes criminal organizations involved in human smuggling or trafficking in persons; and theContraband Smuggling Branch focuses its investigations on organized smuggling groups.

International. Justice and DHS also lead severalefforts to promote international investigative cooperation. Many foreign investigations, for example,are coordinated through the FBI's Office of International Operations. In the Legal AttachÃ© program,FBI agents are stationed in more than 50 countries. They train foreign law enforcement personneland, in return, receive foreign cooperation in gathering evidence related to crimes such as drugtrafficking. (45)

U.S. participation in Interpol is also led by DOJ in cooperation with DHS. Interpol promotescooperation and facilitates information sharing among international law enforcement institutions. A National Central Bureau (NCB) in every Interpol member country serves as the single point ofcontact for cooperating in overseas criminal investigations. Each member country staffs its Bureauwith its own law enforcement officials who are authorized to act within its jurisdiction. The USNCBis under the DOJ, working in conjunction with DHS. (46) It facilitates international law enforcement cooperation as theU.S. representative to Interpol, on behalf of the Attorney General.

Foreign Law Enforcement Training and Assistance

Interagency efforts to train and assist foreign officials, a major component of combatinginternational crime, are led by the State Department's Bureau of International Narcotics and LawEnforcement Affairs (INL).

Through INL's International Narcotics Control and Law Enforcement (INCLE) GlobalAnticrime Programs, for example, multiple U.S. agencies assist and train foreign governments toinvestigate and prosecute drug trafficking and other crimes. INL also leads interagency coordinationof the International Law Enforcement Academies (ILEAs). (47) ILEAs have trained over13,000 officials and promoted regional legal cooperation in 68 African, Asian, European, and LatinAmerican countries.

Issues for Policy Consideration

Coordinating Crime and Terror Policies

Some analysts question whether agencies are giving adequate priority to international crime,given the heightened U.S. focus on terrorism since the September 11, 2001 terrorist attacks. Somebelieve the National Security Council has been slow in leading a government-wide effort to updateor revise the International Crime Control Strategy, released in 1998. (48) Some agencies haveargued, however, that federal coordination of anti-crime efforts are most effectively led by topagency officials. (49)

Many experts believe a more coordinated law enforcement and intelligence approach wouldbetter combat both international crime and terrorism. They point to better coordination in areas suchas money laundering, drug trafficking, and human smuggling. According to some experts, criminalscould be effective witnesses or informants against terrorists. Terrorists may avoid organizedcriminal organizations, many experts believe, if association with them increases their risk of capture. Terrorists may instead commit petty crime or operate smaller, less sophisticated crime rings.According to European law enforcement officials, terrorist cells throughout the Continent commitcrimes ranging from smuggling to car theft to selling pirated CDs. (50) Many experts urgeenhanced cooperation between intelligence and law enforcement at all levels, including local policedepartments. (51)

Measuring Performance

Individual agencies can currently create their own measurement systems on crime-relatedprograms. (52) Someanalysts have called for gauging anti-crime efforts through a broader interagency mechanism. Sucha system, they argue, could give individual agencies some flexibility in controlling their programs. Agencies may point to the difficulties of obtaining solid international crime data. A recentinteragency report on one crime area -- money laundering -- cited additional challenges and concluded that accurately quantifying seized assets is "currently not possible." (53) Reasons include theincompatibility of individual agency tracking systems, varying types of data collected, definitionaldisparities, and redundant recording of seizures among agencies. Many experts believe adequatedata collection underlies any successful performance measurement system.

Enhancing Multilateral Cooperation

Some experts propose expanding U.S. efforts through large multilateral institutions, such asthe United Nations. Some consider multinational conventions to be a valuable tool in improvingglobal law enforcement standards. Others are more skeptical about such treaties. Adherence varies,they point out, and enforcement is frequently lacking. Some analysts believe U.S. efforts are betterspent working with small groups of more trusted partners. Some, for example, believe collectivedecision-making would be more effective through the Group of Eight (G8). Some argue that withmore frequent meetings and improved enforcement, the intergovernmental body and similarstructures could be more flexible in adapting to and fighting transnational threats.

Many believe large international organizations are hindered by bureaucracy. Some analystsadvocate increased efforts through less structured partnerships. For example, the ProliferationSecurity Initiative has no formal bureaucracy; it has instead been described as a loose organizationof key partners. It is this structure, some maintain, (54) that has enabled PSI participants to take faster, more effectiveaction following discoveries such as the nuclear smuggling activities of A. Q. Khan. Others claimPSI is ineffective and question whether its activities can receive adequate Congressional oversight. For many, combating criminal activities requires utilizing a diversity of institutions, some morebureaucratic than others.

Some experts believe that U.S. efforts are better spent working with regional structures, suchas the European Union (EU)'s Europol or Southeast Asia's Aseanapol, which may receive morepolitical backing and funding, than with Interpol. Typically more familiar with each other andfrequently sharing similar crime problems, participating nations may be more willing to shareinformation, harmonize laws, and cooperate in law enforcement.

Some observers are concerned that forming agreements with institutions such as theEuropean Union could damage or water down existing bilateral agreements. Under the BushAdministration, the Departments of State, Justice, Homeland Security, the FBI, the CIA, and otheragencies have actively worked to enhance coordination with their EU law enforcement andintelligence counterparts. Administration treaties include two with the European Union onextradition and mutual legal assistance, and two information sharing agreements with Europol. Some Administration officials have claimed they will continue to pursue U.S.-EU agreementswithout harming current bilateral relationships. (55)

Effective Government/Private-Sector Partnerships

The private sector already plays a major role in combating transnational organized crime. The American financial sector, for example, under the USA PATRIOT Act of 2001 ( P.L. 107-56 ),is charged with monitoring itself for illicit transactions and actively sharing information with thegovernment. Some experts fear that further regulating the financial, technology, communications,and other industries would hinder their growth and increase government costs. In certain cases,many Americans may have privacy concerns about government involvement in the private sector.

Many experts advocate more government/private-sector partnerships. For example,companies with extensive transportation networks could assume greater responsibility for contrabandand dangerous materials inspection. The government could randomly audit these areas, and, inreturn, decrease burdensome customs inspections for companies at borders.

Leveraging Technology

Some experts advocate expanding the development of technology to detect, track, and protectagainst criminal activities. Congress may face decisions over which, if any, programs to fund. Inrecent years, crime detection has benefitted from powerful new modeling software and data-miningtools. Many banks, for example, are using money laundering software that can sift through millionsof transactions to spot suspicious patterns. Government agencies are turning to similar programs todetect and map criminal activities. Aiming to fight illicit trade by improving product identificationand authenticity, radio frequency identification devices (RFIDs) are becoming more widespread. Some agencies propose greater development and use of biometric technology, which identifiespeople through unique physical characteristics. The European Union is working to include biometricindicators on its passports, and the United States is expanding biometric recognition requirementsfor foreigners entering the country. (56)

Focusing Federal Efforts Against Organized Crime

Some experts propose easing certain laws to allow the government to concentrate its limitedresources on the most pressing criminal activities. For example, some advocate decriminalizing thepossession of small amounts of marijuana. Many foreign countries have reduced legal penalties formarijuana possession. Approaches such as these can be controversial and politically difficult; criticsbelieve they risk sending society an inappropriate message.

Conclusion

An improved understanding of international organized crime's dynamics might help Congressas it coordinates, funds, and oversees anti-crime policies and programs. Improved data collectionand establishing a clear picture of the relative threats posed by various criminal activities wouldclearly be helpful. In addition, a closer scrutiny of the nexus between crime and terror could improvethe government's ability to fight both. Stronger international law enforcement cooperation and moreeffective government partnerships with the private sector both may be central to effectivelycombating transnational organized crime.

Appendix: U.S. Efforts Against Transnational Organized Crime: Agency Roles and Congressional Action

This appendix describes key U.S. programs, initiatives, and legislation to combattransnational crime. It provides additional information on the five criminal areas discussed in "KeyFederal Programs and Initiatives," above.

WMD Smuggling

U.S. anti-nuclear smuggling efforts are coordinated by the Departments of State, Defense,Energy, Homeland Security, Commerce, and other agencies.

State and Defense Departments. These agencieslead coordination of the Proliferation Security Initiative. Announced by President Bush in May2003, it creates international agreements and partnerships to permit the United States and its alliesto search planes and ships suspected of carrying nuclear material or technologies. In addition, theDOD-managed Cooperative Threat Reduction program works to destroy nuclear weapons, especiallyin the former Soviet Union. The State Department also funds the International Science andTechnology Centers in Russia and Ukraine to help employ scientists with nonweapons-relatedprojects.

Energy Department. DOE runs several programsto secure nuclear weapons and weapons-usable nuclear materials. The International MaterialsProtection, Control, and Accounting program works in the former Soviet Union and other countries. Its activities include upgrading security at nuclear sites, consolidating material into more securelocations, and improving nuclear smuggling detection capabilities at borders. The President'sFY2007 budget requests about $1.12 billion for Energy, State, and Defense Department programsthat provide nonproliferation and threat reduction assistance to Russia and other former Soviet states. This compares to about $1.02 billion appropriated in FY2006. The FY2007 request includes $372.1million for DOD's Cooperative Threat Reduction programs, down from $415.5 million in FY2006. The request includes $675 million for Energy Department WMD threat-reduction efforts, up from$530 in FY2006. It also calls for $75 million in comparable State Department funding, up from $71million in FY2006. (57)

Homeland Security Department. The goal of theContainer Security Initiative, launched in January 2002 by the former U.S. Customs Service (nowpart of DHS) is to increase inspection of the approximately seven million shipping containersentering the U.S. annually. DHS's Customs and Border Protection (CBP) is generally charged withprotecting U.S. borders from incoming nuclear material. Its efforts include border patrols, seaportsecurity, and customs inspections. DHS also leads interagency efforts to develop technology toprotect the United States from WMD threats.

Commerce Department. Commerce's Bureau ofIndustry and Security (BIS) is responsible for safeguarding U.S. national security and for promotingits foreign policy and economic interests by implementing U.S. export-control policy on dual-usecommodities, software, and technology. As part of the State Department's Export Control andRelated Border Security Assistance Program (EXBS), BIS helps other countries develop and enforceeffective export controls through workshops, training, and other activities.

Recent Legislative Activity. A number of nuclearblack market-related proposals are contained in the Foreign Relations Authorization Act for FY2006and FY2007 ( H.Rept. 109-168 , H.R. 2601 ). Title VIII, the Nuclear Black MarketElimination Act, has four basic components. These are: sanctions, penalties for corporate entitiesassociated with proliferation activities, incentives for proliferation-interdiction cooperation, andnonproliferation conditions required to receive U.S. assistance. Another H.R. 2601 sectioncalls for the U.S. government to ask Pakistan for direct access to A.Q. Khan in order to furtherinvestigate his nuclear smuggling activities. (58)

Drug Trafficking

A number of U.S. agencies, coordinated mainly by the State Department's Bureau ofInternational Narcotics and Law Enforcement Affairs (INL), run anti-drug programs and initiatives. U.S. anti-narcotics efforts center primarily on foreign crop eradication and global narcoticsinterdiction. The State Department and other agencies help eradicate crops by providing foreigncountries with equipment and supplies.

State Department. INL manages the AndeanCounterdrug Initiative (ACI), the primary U.S. program supporting counternarcotics and economicdevelopment in the Andean region. (59) ACI funding from FY2000 through FY2004 totals about $3.5billion. Congress appropriated $731 million for ACI in FY2005; $734.5 million was approved forFY2006. The White House is requesting $721.5 million for FY2007.

INL also leads other agencies in training and assisting foreign law enforcement, managinginteragency coordination of programs such as the International Law Enforcement Academies(ILEAs). ILEAs train foreign personnel and promote international legal cooperation. (60) They have trained over13,000 officials from 68 countries in Africa, Asia, Europe, and Latin America.

The U.S. Agency for International Development (AID) also funds a variety of anti-narcoticsprograms. Many promote education, institutional development, and alternative employment forpeople involved in drug production. AID also provides balance of payments support to compensatecountries (especially Andean) forgoing drug export revenue.

Justice Department. Drug Enforcement Agency(DEA) agents cooperate with law enforcement agencies in 58 countries in activities such as bilateralinvestigations, institution building, and training. In the Justice-led Southwest Border Initiative(SWBI), several federal agencies work to combat Mexico- and Colombia-based trafficking groupsoperating along the Southwest Border. Working in concert, the DEA, the FBI, the U.S. CustomsService, and U.S. Attorneys' offices around the country conduct wiretaps aimed at tracking drugmovements and identifying traffickers. DEA and other Justice Department officials play a centralrole in bringing smugglers to face justice in the United States through extradition, a significantjudicial tool in combating narcotics.

Defense Department. DOD responsibilitiesinclude heading federal efforts to detect aerial and maritime drug trafficking toward the UnitedStates. DOD analysts also work with DEA and other U.S. agents to execute anti-narcotics actionsin key drug production and transit countries.

Recent Legislative Activity. The FY2006 ForeignOperations Appropriations Act ( P.L. 109-102 , H.R. 3057 ) authorizes $734.5 millionfor ACI in FY2006. In addition, the FY2006 National Defense Authorization Act ( P.L. 109-163 , H.R. 1815 ), signed by the President on January 6, 2006, authorizes $901.7 million forDefense Department global drug interdiction. Unlike the FY2005 authorization, it did not includeprovisions relating to Colombia or the Andean Counterdrug Initiative. (61)

Trafficking in Persons

Interagency anti-trafficking efforts are led by the State Department. Other agencies,including the Departments of Justice, Health and Human Services, Homeland Security, and Labor,also play key roles.

State Department. The Victims of Traffickingand Violence Protection Act of 2000 ( P.L. 106-386 ), signed into law October 28, 2000, containedseveral key anti-trafficking provisions. One established an annual State Department Trafficking inPersons Report. First issued in July 2001, it reviews anti-trafficking trends and rates countries'anti-trafficking efforts.

P.L. 106-386 also authorizes the President to impose sanctions, under the InternationalEmergency Economic Powers Act ( P.L. 95-223 ), against countries that do not meet anti-trafficking"minimum standards." (62) Also authorized was the Interagency Task Force to Monitor andCombat Trafficking in Persons. Created in 2002, it includes the Secretary of State, the AttorneyGeneral, the Secretary of Labor, and other top officials. It receives assistance from the StateDepartment Office to Monitor and Combat Trafficking in Persons.

Justice Department. The Trafficking in Personsand Worker Exploitation Task Force, established by the Justice and Labor Departments, is chargedwith coordinating anti-trafficking investigations and prosecutions. On January 24, 2002, theAttorney General announced the implementation of a special "T" visa, authorized under P.L.106-386 , to assist trafficking victims cooperating with law enforcement officials. Victims facingsignificant retribution or other risks upon returning abroad may be granted permission to remain inthe United States and are eligible to apply for permanent residency after three years.

Recent Legislative Activity. On October 7, 2005,the Senate ratified the United Nations Protocol to Prevent, Suppress, and Punish Trafficking inPersons, (63) to which theUnited States became a party on December 3, 2005. Currently 113 countries have signed theProtocol, with 94 countries party to the agreement.

On January 10, 2006, the President signed the Trafficking Victims Protection ReauthorizationAct of 2005 ( P.L. 109-164 ). Among other things, the bill aims to assist foreign trafficking victimsin the United States, address the needs of child victims, and develop anti-trafficking programs inpost-conflict situations and foreign humanitarian emergencies. It authorizes $188 million in 2006and $173 million in 2007 to combat human trafficking. (64)

Intellectual Property (IP) Crimes

The Office of the United States Trade Representative (USTR) leads other agencies includingthe Departments of Commerce, State, Justice, and Homeland Security in combating IP violations.

USTR. A centerpiece of U.S. efforts tostrengthen IP enforcement is the annual USTR-led "Special 301 process," (65) which seeks to identifycountries lacking adequate intellectual property protection. If a trading partner is identified as aPriority Foreign Country (PFC), the USTR has 30 days to decide whether to investigate the countries'questionable policies. Such an investigation can lead to separate intellectual property agreementswith the PFC or to U.S. trade sanctions. USTR also manages several tariff preference programs,such as the Generalized System of Preferences. (66)

Many U.S. anti-piracy initiatives involve forging international agreements, often through theWorld Trade Organization (WTO). Through the WTO, the USTR can initiate dispute settlementproceedings against foreign governments and institutions; a stringent WTO membership applicationprocess also promotes tougher IP laws. Free trade agreements (FTA) help, too; FTA partner nationsmust bring their enforcement regimes up to U.S. legal standards, as mandated by the BipartisanTrade Promotion Act of 2002 ( P.L. 107-210 ). (67)

In October 2004 the Administration launched the interagency Strategy Targeting OrganizedPiracy (STOP!), which aims to strengthen existing anti-piracy efforts and includes new actions suchas the creation of a government IP complaint hotline.

Homeland Security Department. DHS's effortsinclude seizing pirated goods at U.S. borders and ports. According to the agency, it made more than7,200 seizures valued at nearly $140 million in FY2004. Chinese goods comprised almost 70% ofthis value. DHS is developing a risk-assessment computer model to help target suspected shipments.

Recent Legislative Activity. The 109th Congresshas seen a number of legislative actions related to trade and IP violations. The United States TradeRights Enforcement Act ( H.R. 3283 ), for example, would boost funding and increaseenforcement through several federal agencies. Among other things, it would authorize an additional$6 million for the USTR beyond the President's budget request for FY2006 and FY2007, for a totalof $44.78 million and $47.02 million, respectively. H.R. 3283 passed on July 27, 2005. A similar bill, S. 1421 , has been introduced in the Senate.

Another bill, H.R. 4186 , would create a Chief Trade Prosecutor to ensurecompliance with trade agreements. Separate legislation, S. 2317 , would require theUSTR to identify trade enforcement priorities, take action with respect to priority foreign countrytrade practices, and establish within the USTR's office a Chief Enforcement Officer and a TradeEnforcement Working Group. (68)

Money Laundering

U.S. anti-money laundering efforts are coordinated by the Departments of Treasury, Justice,Homeland Security, and other agencies.

Department of Treasury. The Office of Terrorismand Financial Intelligence (TFI) and its subsidiary bureaus safeguard domestic and foreign financialsystems through financial sanctions, financial regulation and supervision, international initiatives,private sector outreach, law enforcement support, and other methods. TFI and Treasury bureaus suchas the Financial Crimes Enforcement Network (FinCEN) support U.S. law enforcement agencies ininternational financial crime investigations and provide U.S. policymakers with global moneylaundering analyses.

FinCEN and other Treasury affiliates cooperate with 32 foreign government institutions toimprove international money laundering standards through the Financial Action Task Force (FATF). FinCEN also participates in global anti-money laundering networks. The Egmont Group iscomprised of FinCEN and 100 similar international agencies. Egmont works to expand, systematize,and secure information sharing among its members.

Department of Justice. The Asset Forfeiture andMoney Laundering Section guides law enforcement agencies on money laundering-relatedinvestigations and prosecutions. It also coordinates multi-district investigations and prosecutions,develops regulatory and legislative initiatives, and ensures uniform application of forfeiture andmoney laundering statutes.

Homeland Security Department. U.S.Immigration and Customs Enforcement (ICE) manages a handful of money laundering programs andinitiatives. Its Financial Investigative Program investigates money laundering crimes involvingdrugs, human smuggling, telemarketing fraud, and counterfeit goods trafficking. ICE's domestic andinternational money laundering operations are coordinated through its Money LaunderingCoordination Center.

Recent Legislative Activity. The USA PATRIOTImprovement and Reauthorization Act ( P.L. 109-177 , H.R. 3199 ), contains significantlanguage on money laundering. Signed by President Bush on March 9, 2006, it will, among otherthings, increase penalties for financing terrorist activities and place greater restrictions on certainmoney-transferring businesses. (69)