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A view of Mount Etna from Reggio Calabria, the main city of Calabria, which is the home of the ’ndrangheta group, viewed as the most powerful mafia in Italy. Image courtesy of Jacopo Werther/Wikimedia.

On Tap Europe: Organised Crime and Illicit Trade in Italy: Country Report

Aurora Ganz and Cathy Haenlein
Occasional Papers, 13 December 2017
Illicit Trade, National Security and Resilience Studies, Organised Crime, Organised Crime
This is the fifth and last in a series of five country-level papers on the role of organised crime groups in the illicit trade in tobacco, alcohol and pharmaceuticals across Europe, focusing on Italy as a case study.

Italy has long been a hub for criminal activity of all kinds: its mafias are known globally for their wide-ranging criminal portfolios, control over territory and ability to penetrate domestic state structures. 

In terms of illicit trade, it is clear from law enforcement operations that the mafias – and broader organised crime – play a central role. The form this takes, however, varies by location and commodity. At times, mafias themselves may run illicit trade supply chains; at others, foreign organised crime groups (OCGs) manage day-to-day operations with mafia authorisation and oversight.

Italy plays various roles in facilitating the illicit trade in tobacco, alcohol and pharmaceuticals, acting as a source, transit and destination country for different products. In responding to this situation, Italian law enforcement does not view illicit trade in isolation. Instead, strategically and operationally, it is accepted as an integral part of wider organised criminal portfolios, as well as broader categories of economic crime.

This paper identifies four core drivers of illicit trade across Italy. The first is the broad social acceptability of buying and selling illicit goods. This is most pronounced in hotspots such as Naples, where little social stigma is attached to illicit trade and little attempt is made to hide illicit consumption. Here, individuals involved in illicit trade may be regarded as providing a service to poorer citizens, with many quick to excuse participation on this basis.

A second driver is linked to the accessibility of illicit products. Again, Naples provides a clear example: the city’s longstanding smuggling history ensures that advanced infrastructure for distribution exists, with sales taking place openly in the streets and other public areas. At the same time, particularly for illicit pharmaceuticals, the use of online marketplaces allows access to illicit products at a click, and even next-day delivery.

Third, price differentials play a key role in driving illicit trade in Italy. These are linked to the country’s shared borders with both Slovenia (as a core access route from Eastern Europe) and higher-priced northern EU markets. This position bolsters the country’s role as a transit and destination hub: an average pack of cigarettes sells at €3.05 in nearby Croatia and €3.51 in neighbouring Slovenia, compared to €4.76 in Italy and significantly more in Italy’s northern neighbours.

Fourth, corruption acts as an enabler of both illicit trade and broader organised crime in Italy. This is due, in many cases, to the extensive infiltration by the mafias of the public sector, from municipalities to healthcare facilities. Meanwhile, a number of prominent cases of irregular activity in the tobacco industry have shown the role of private sector corruption in facilitating illicit trade.

Key Findings

  1. Data on the scale and scope of illicit trade in different commodities is patchy. As with other countries studied in this series, there is more comprehensive data available on illicit tobacco than on illicit trade in the pharmaceutical and alcohol sectors. These discrepancies in the extent of available information make it difficult to assess the comparative scale of activity, potentially influencing perceptions of the broader threat landscape. In addition, the limited intelligence picture makes trend analysis more challenging, potentially hampering the effective prioritisation of law enforcement activity.

  2. OCGs involved in illicit trade in Italy operate as part of a complex, highly active and longstanding organised crime community, at the heart of which are the country’s mafias. In this context, illicit trade depends on cooperation: while in some cases Italian mafias deal directly in illicit goods, in others foreign OCGs take the lead, forfeiting a percentage of their profits in ‘tax’ to the local mafia for the use of strategic areas of arrival and transit. Beyond areas dominated by the mafias, however, this influence wanes, with foreign OCGs able to exert greater control over illicit trade supply chains.

  3. Italy plays several strategic roles in illicit trade supply chains. Most notably, the country acts as a core transit hub, given its position as a bridge between Eastern Europe, North Africa and the broader EU. This encourages smuggling both through sea ports and across land borders. However, Italy is also a source and destination country: for example, the theft of medicines from Italian medical facilities is a major source of pharmaceuticals smuggled across Europe. Meanwhile, the country’s role in the illicit alcohol trade varies with the specific commodity in question.

  4. Illicit trade in Italy is highly localised. In part, this is a function of the strong attachment of the country’s mafias to their local territories, and their control over strategic areas of import and export within them. The existence of ‘hotspots’ in key regions is perhaps most pronounced in relation to illicit cigarettes: while illicit consumption sits at less than 5% of total consumption in many Italian regions, it accounts for a striking 33% of total consumption in Campania, and as much as 21% in Friuli-Venezia Giulia. These patterns reflect the location of two of the key hubs for illicit cigarettes entering Italy: Campania is home to the busy port of Naples, while Friuli-Venezia Giulia borders Slovenia, a core entry point for cigarettes from lower-priced Eastern Europe.

  5. A strength of the Italian response to illicit trade lies in the rich body of legislation and extensive institutional architecture built up over time to disrupt organised crime activity. This experience has also benefited Italy’s operational approach to illicit trade, which is characterised by strong recognition of the link to organised crime, including the mafias. However, a recent move towards the decriminalisation of some smuggling activities hints at a shift in approach; the government now treats certain illicit trade activities as administrative offences and penalises them through fines. This reform could pose new challenges to law enforcement as OCGs adapt their methods in response, to further reduce risk and minimise losses.

ABOUT THE ON TAP EUROPE SERIES

According to Europol, commodity counterfeiting and illicit trade in substandard goods are major emerging criminal activities in the EU. The low risks and high profitability associated with illicit trade increasingly attract organised crime groups and the number of counterfeit products seized by law enforcement agencies across Europe continues to grow. The eighteen-month On Tap Europe study provides a comparative analysis of the role of organised crime in the illicit trade of tobacco, alcohol and pharmaceuticals across the EU, gathering evidence from a number of member states.

The six-part series explores the scale, methods and routes of these organised criminal networks, and identifies best practice in policy and law enforcement responses. The final report examines how these issues affect Europe as a whole; it features a series of recommendations for the European Commission, its agencies and EU member states.

Author

Aurora Ganz
Research Fellow
Aurora Ganz is research fellow in RUSI’s National Security and Resilience team. Her research concerns organised crime, drug... read more
Cathy Haenlein
Senior Research Fellow, National Security and Resilience

Cathy Haenlein is a Senior Research Fellow in RUSI’s National Security and Resilience Studies group, where she leads the Institute’s... read more

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