Cutting the Link Between Illegal Drugs and Terrorists

By: LTC Kashif J. Khan, Pakistan Air Force and Police Chief Inspector Olcay Er, Turkish National Police

The nexus between some terrorist organizations and the illegal drug trade has broadened since the end of the Cold War.1 According to a recent study, "The illegal drug trade is estimated to turn over more than $330 billion annually,"2 and terrorist organizations have actively participated in this trade.3 In order to combat terrorist activities effectively, counterterrorism forces and agencies should address the question of funding, of which drug trafficking is a main source. Drug traffickers around the world require assistance from groups that have military skills, weapons, access to clandestine networks, and safe havens. While "opiates and cocaine remain the most problematic drugs across the globe,"4 this article looks at only opiates, as they are the most profitable and lethal illicit drugs.

The United Nations Office on Drugs and Crime (UNODC) 2012 World Drug Report states that Afghanistan generates 63% of the world's poppy crop.5 Of the 75–80 metric tons of heroin trafficked to Europe in 2009, 60 metric tons were transferred along a route through the Balkans with the direct involvment of the PKK (Kurdistan Workers' Party, a militant Kurdish separatist group active primarily in Turkey and Iraq), which has emerged as a major drug trafficker.6 This article spotlights the opium–heroin trafficking link between the primary terrorist organization operating in Afghanistan, the Taliban, and the group reaping the highest benefit from the heroin trade in Europe, the PKK.7

During our research, we found a gap in the data concerning the exact value of money being generated by these terrorist organizations through the drug trade. In addition, none of the studies we looked at tried to identify vulnerable links in the drug trafficking chain, the targeting of which might cut one of the terrorist organizations' primary revenue streams. With these two analytical gaps guiding us, we first identified five stages in the illicit drug trafficking process: cultivation, processing, shipment, sale, and consumption. The study then calculates the extent of the Taliban's and the PKK's involvement in each of these five stages. This research creates a counter-narcoterrorist model that displays weak and vulnerable links in the narcotics supply chain, which we use to propose countermeasures and present ways to reduce the funding these terrorist groups are gaining through illicit drug trafficking.

The Opium Nexus Between the Taliban and the PKK

Determining how much the Taliban benefit from the drug trade each year is a matter of great debate, and estimates range from $30–200 million (all figures are given in U.S. dollars).8 Since the Taliban do not keep records in either handwritten or digital form, it is unlikely that their drug earnings can be calculated with complete accuracy. Nevertheless, the 2009 UNODC report, "Addiction, Crime and Insurgency: The Transnational Threat of Afghan Opium," estimated that a decade ago the Taliban earned $75–100 million per year by taxing opium poppy cultivation; however, since 2005, the Taliban have earned $90–160 million per year from the taxes they collect on opium production and trade.9 According to our calculation, the Taliban earn approximately $530–570 million annually from the cultivation, processing, and shipment of opium and heroin. The breakdown of this money stream is illustrated in Figure 1.

After leaving Afghanistan, opium travels to different parts of the world. Although the highest demand is in Asia, the greatest profit is generated in the European market. The main route from Afghanistan to Europe is via Iran and Turkey to the Balkan region. It is along this route that the PKK run the most active smuggling operation and where they gain the highest profit. There are numerous estimates of the PKK's revenue derived from the illegal drug trade, varying from $50 million to $2.5 billion.10 According to our calculation, using figures from the 2010 UNODC report, "The Globalization of Crime: A Transnational Organized Crime Threat Assessment," the PKK generates approximately $600–700 million annually from the heroin trade. Figure 2 depicts the breakdown of this revenue stream.

Cultivation

Heroin is produced from the sap of the opium poppy, a flowering plant that blossoms in warm, dry climates. The plant requires a growing period of six to seven months and is generally cultivated in the ungoverned zones of countries with a weak central government. The main reason farmers engage in opium cultivation despite its illegality is the incomparable profits involved in this business.11 The most suitable places for its cultivation are Afghanistan and the so-called Golden Triangle, the mountainous region shared by Myanmar, Thailand, Laos, and Vietnam.12 According to the 2012 UNODC report, Afghanistan remains the main country for opium poppy cultivation, and accounts for two thirds of the global opium crop.13

Recent UNODC statistics have shown that between 2008 and 2012, opium cultivation increased in the Taliban-controlled regions of Afghanistan. The Taliban provide protection and support to Afghan farmers to cultivate their poppy crops and then tax the yield. Gretchen Peters stated that the Taliban collect a 10% tax or tithe (called ushr in Arabic) from the poppy farmers in their area of control, and this percentage of taxation is applicable at the farm level.14 In addition to the profit the Taliban make by taxing farmers, they apparently also have started growing poppy on their own, despite professed religious scruples. This poppy cultivation is done covertly by the Taliban, and they avoid portraying themselves as opium farmers. (While the Taliban clearly play an active role in opium production, this study did not find any evidence that the PKK participate in the opium cultivation phase.) The UNODC estimated that the Afghan opium yield in 2011 was 5,800 metric tons, of which 98% came from Taliban-controlled regions. The 2011 average farm-gate price of raw opium was $250 per kg in Afghanistan.15 This means that the Taliban netted approximately $142 million from the 2011 opium crop alone. The equation for calculating the Taliban's revenue from opium cultivation is shown as follows.

10% of opium production in kg
% of opium cultivated on land under Taliban control
Farm gate price of opium in $/kg
Cultivation revenue (2011)

580,000
× 0.98
x 250
= 142,100,000

Processing

The cumbersome process of turning raw opium tar into pure heroin consists of nine stages: extracting morphine from the raw opium; separating the morphine solution from the water-insoluble opium components; treatment of the water-insoluble opium constituents; precipitation, isolation, and drying of the morphine; conversion of the morphine into heroin base; precipitation and isolation of the brown heroin base; purification of the brown heroin base; precipitation and isolation of the white heroin base; and conversion of the heroin base to heroin hydrochloride, the drug sold on the street.16

The Taliban also tax drug processors according to the amount of refined end product they produce. There are different types of opium products, such as raw opium, morphine base, and refined heroin, and the level of taxation varies for the different products. In 2011, total heroin production in Afghanistan was estimated at around 467 metric tons.17 According to Gretchen Peters, the Taliban control more than 50 laboratories within Afghanistan, and levy a tax of $250 for every kilogram of refined heroin that comes out (morphine base is taxed at a slightly lesser rate).18 Thus, in 2011 the Taliban collected approximately $116 million from the refining process. The equation for calculating the Taliban's revenue in heroin production is depicted as follows.

Heroin processed in kg
% of heroin labs under the Taliban control
Revenue charged by the Taliban $/kg
Processing revenue

467,000
× 1.00
x 250
= 116,750,000

The PKK also directly or indirectly involve themselves in opium processing operations. They either own or tax the drug laboratories situated in regions under their control. The U.S. Treasury Department has evidence that the PKK process morphine base they receive from Afghanistan into heroin at laboratories situated in Turkey, and that they then sell their product to distributors throughout Europe.19 Table 1 depicts the UNODC data on opium products from Afghanistan.

According to our calculation, the PKK generate approximately $25 million annually from heroin processing. The equation for calculating this revenue is depicted as follows.

Heroin processed in kg
% of heroin labs under PKK control
Tax charged by the PKK–$/kg heroin
Processing revenue

50,000
x 1.00
x 5.00
= 25,000,000

Shipment

Shipment refers to the movement of heroin from the laboratory where the opium was processed to the point of sale. There are three main routes for moving opium out of Afghanistan to where it will be processed into heroin, and the Taliban either control these routes or provide protection and diversion tactics to ensure safe movement of the opium. This stage is the node within the drug trafficking process whereby the Taliban generate the highest revenue, which, according to our calculations, comes to approximately $300 million annually. The equation for calculating the Taliban's revenue from heroin shipment is depicted as follows.

Heroin shipped from the Taliban controlled regions in kg
Rate of transport protection fees $/kg
Shipment Revenue

360,000
x 850
= $306,000,000

According to Sedat Laciner, the PKK have taken advantage of their good luck at being located along the drug smuggling route of the "Golden Crescent," between the opium-producing East and the heroin-consuming West.21 Benjamin Freedman and Matthew Levitt noted that the PKK get their highest profit by taxing the drug smugglers in regions under their control, and this taxation serves as a crucial income source for the group.22 According to our calculations, the PKK generate approximately $325 million annually from the shipping of heroin, in addition to wholesale revenue.23 The numbers in the calculation of heroin shipment revenue shown below are for Norway, a country we chose at random to represent all European countries. However, we use a similar procedure for calculating the PKK's revenue generated from the rest of the European countries. In our calculation, the wholesale revenue is added to the shipment revenue because the heroin has not yet reached the consumers.

Total heroin (kgs) trafficked on the Balkan Route
Est. PKK's traffic share at the Turkish border
Taxation rate
Percentage value of heroin smuggled by the PKK
US$/1 kg of heroin in the Afghan wholesale market
Taxation revenue from shipping (US$)

80,000
x 0.8
x 0.1
x 0.2
x 2400
= 3,072,000

Plus

Kgs of heroin entering a European country (figure for Norway)
Prevalence ratios of users in Norway
Population of Norway aged 15-64
24
(Total population of Kurdish diaspora in Norway)
Est. market share of the PKK
(If diaspora ratio < 0.005, est. wholesale share for PKK
(1-retail share for PKK)
Wholesale price of heroin for Norway ($/kg)
Wholesale Revenue (US$)

1,000
x 0.0003
x 2,195,734
x (3,182,224/12,447)
x 0.0073

x 0.0025
x 22,120
= $6,798,566

Sales

Sales are the middle node between shippers and consumers, and involve both the wholesale and retail drug markets. The Taliban actively involve themselves by either taxing drug traders or directly engaging in the growing and processing of opium; however, they always tend to separate themselves from selling these illicit drugs. According to Peters' survey, local people acknowledge the Taliban's role in the drug trade; however, they categorically deny the Taliban's direct involvement in the sale of heroin.25 Therefore, this research does not find that the Taliban gained any revenue from the sale of heroin.

The PKK are actively involved in heroin sales across Europe, utilizing the Kurdish diaspora to control the street-level sales of illegal drugs in the European market.26 They also tax other drug sellers, and generally control nearly all of the European heroin market. Even Kurdish children 10 to 15 years old are involved in selling drugs in many European cities.27 Similarly, the heavy PKK involvement in the drug trade is evidenced by the number of PKK members who are arrested for criminal activity in various European cities and in Turkey.28 According to our calculations, the PKK earn approximately $300 million annually from street sales of heroin.29 The figures we use to calculate sales revenue in the equation below are again for Norway only, although we use a procedure similar to the previous equation to calculate the PKK's revenue generated from the rest of the European countries.

Amount of heroin (kgs) reaching Europe (figures for Norway)
Prevalence ratios of users for Norway
Population of Norway aged 15-64
(Total population of Kurdish diaspora in Norway)
Est. percent market control for PKK
If diaspora ratio >=0.005, then PKK est. retail share, otherwise,"0"
Retail price of heroin in Europe x 1000 (tons into kgs)
Street Level Sales Revenue (US$)

1,000
x 0.0003
x 2,195,734
x (3,182,224/12,447)
x 0.0073
x 45 x 0.0021
x 1,000
= $11,617,802

 

Consumption

Consumption is the last step in the illegal drug trafficking process and completes the supply-and-demand chain. A United Nations estimate of annual opiate consumption from 1998 to 2008 reveals a global increase of 34.5%, from 12.9 million people in 1998 to 17.35 million people in 2008.30 According to the 2012 UNODC report, there are approximately 21 million opiate users worldwide, suggesting an increase of 21% in consumers from 2008 to 2012.31 The main reason for such an increase in consumption is the decreasing prices of these illicit drugs.32

If members of the Taliban consumed heroin, it could be a financial drain on their organization. However, according to the Taliban ideology and their version of Islam, the consumption of any opiate is prohibited, while the production and trade of opium to non-Muslims are allowed.33

The PKK encourage people to consume illicit drugs because of the enormous revenue generated; selling heroin to drug addicts helps fulfill the organization's political objectives. According to Hasim Soylemez, two drug dealers confessed that the PKK give drugs to young people in the east and southeast parts of Turkey as a reward for participating in pro-PKK demonstrations. In the Hakkari district, the average age of drug consumers is 14 years old, and an estimated 45% of the children around this age are addicted to illegal substances.34 Over the long run, it seems likely that the PKK would suffer a significant cost from this behavior, if nearly half of the population of potential new recruits to their organization are heroin addicts.

Counter-Narcoterrorism Solution Model

The process of narcotics trafficking diverges or converges at each stage of the production-trafficking chain. Figure 3 displays the counter-narcoterrorism model from opium cultivation to street-level sale. What it makes clear is that the opium from widespread poppy fields converges at a few countable and targetable morphine/heroin processing labs. The opium products then follow an increasingly divergent path from the processing to the marketing stage. This path also splits into smaller sub-nodes as it moves from smuggler to distributor to street pusher to user, which make effective interdiction very difficult. It is important to note that the heroin processing stage is the only stage in the chain where the paths of raw material, processor, and smuggler converge into a relatively few targetable facilities. Therefore, this model proposes that the processing stage should be targeted for interdiction.

Although the processing stage only accounts for approximately one fifth of the total opium revenue appropriated by the Taliban, disrupting it can cut the Taliban's resource stream through the rest of the drug trafficking chain. If less heroin were available from Afghanistan, the PKK's funding stream would be substantially reduced as well. The PKK are comparatively less vulnerable in the processing stage of the drug trafficking chain, however, because they tax or run only a few heroin processing labs. Nevertheless, this model suggests that any increase in the PKK's involvement in the heroin processing stage would make them relatively more vulnerable to counterterrorism efforts.

Recommendations

The countermeasures that will affect these two terrorist organizations the most involve reducing their drug money. This article demonstrates that both the Taliban and the PKK gain huge amounts of money from the heroin trade. Therefore, there is a strong need to combat the illegal opium trade as a counterterrorism measure, and it requires a long-term commitment, policy amendments, and effective law enforcement efforts.

Targeting the Processing Stage

According to this article's findings, targeting the heroin processing stage is not only cost effective, but also a viable option. Compared to other stages in the drug trade, this stage is the only one where the product streams converge into countable and targetable facilities. Targeting the cultivation, shipment, and sales stages requires comparatively more resources than would the destruction of the laboratories; so far, these strategies have also proven ineffective, given that supplies remain high and prices low at the consumer level. Attacking the processing laboratories also substantially reduces both the Taliban's and the PKK's drug revenues, since it directly affects the rest of the drug trafficking chain.

Through intelligence, the exact locations of the heroin laboratories can be traced. The laboratories located within the better-governed zones should be targeted with the combined help of local and international law enforcement agencies. The main aim of this type of ground raid is to physically destroy the labs and make them permanently unusable. The labs located in ungoverned zones should be targeted by international coalition air strikes.

Heroin manufacturing requires specific precursor chemicals, which originate primarily in Europe. Therefore, there is a strong need for an international policy that puts more stringent controls on precursors as dual-use substances. These chemicals should be treated in a similar manner to legal drugs that are also used for illicit purposes. By stopping the precursors from reaching the heroin laboratories, the processing stage will become very difficult. In order to develop a strategy for seizing illegal shipments of precursors, it will be necessary to identify the agents, and the possible routes and methods of transportation, and subsequently launch a comprehensive attack against all nodes of clandestine precursor shipment.

Policy Measures

Despite the concentrated efforts of international agencies and governments, there is no evidence of success against narcoterrorism. An ongoing program run by several international organizations that offers alternative livelihoods to farmers should be continued as an effective and long-term narcoterrorism countermeasure. This policy decreases the amount of opium yield, which reduces the funds going to terrorist organizations. The other strategic effect of this policy is to erode much-needed popular support for the Taliban terrorist organization. The eradication of poppy crops can be a part of the policy, but it must be implemented only in areas that are free of terrorist activities and where sufficiently remunerative alternatives are available to the farmers.

Conclusion

This article illustrates the extent to which two terrorist organizations, the Taliban and the PKK, raise funds in the five stages of the heroin trade: cultivation, processing, shipment, sale, and consumption. The Taliban and the PKK generate huge amounts of money from the opium trade. The Taliban make most of their money from the cultivation, processing, and shipment stages; the PKK mostly earn their funds from the shipment and sale of heroin. These two terrorist organizations have their peculiar strengths and weaknesses, some of which are identified in this article. The identification of weak and potentially vulnerable links between terrorist organizations and drug trafficking can help law enforcement, drug control, and financial oversight agencies effectively combat this menace.

The counter-narcoterrorism solution model displays both the convergent and divergent stages of the opium trade. The processing stage is the only stage where the products converge into countable and targetable laboratories. This model demonstrates that targeting the opium-to-heroin processing laboratories is not only cost effective, but also reduces both the Taliban's and PKK's illegal funding streams. This model can be applied to other terrorist organizations and other illicit drugs as a means to identify and reduce the funds generated through drug trafficking.

Lastly, this article does not try to solve drug abuse problems but attempts to demonstrate a cost-effective way to reduce the funds received by terrorist organizations through illegal drug trafficking. It provides a direction for intelligence work, and describes a particularly vulnerable stage at which to effectively target narcoterrorism. The question of who, how, and when is open for further study.

About the Author(s): Chief Inspector Olcay Er is superintendent of the Police Academy in Ankara, Turkey. Wing Commander Kashif J. Khan has served in the Pakistani Air Force for twenty years as a fighter pilot and flight instructor.


NOTES:

1. James Piazza, "The Illicit Drug Trade, Counternarcotics Strategies and Terrorism," Public Choice no. 149 (2011): 298.

2. Steve Rolles, George Murkin, Martin Powell, Danny Kushlick, and Jane Slater, "The Alternative World Drug Report: Counting the Costs of the War on Drugs," Count the Costs Project, Transform Drug Policy Foundation, Bristol, United Kingdom, 2012.

3. "Narco–Terrorism: International Drug Trafficking and Terrorism–A Dangerous Mix," Hearing before the U.S. Senate Judiciary Committee, J-108-12, 108th Congress, 1st session, 20 May 2003: 1.

4. Caterina Gouvis Roman, Heather Ahn-Redding, and Rita James Simon, Illicit Drug Policies, Trafficking, and Use the World Over (Lanham: Lexington Books, 2007), 15.

5. United Nations Office on Drugs and Crime (UNODC), "World Drug Report 2012," Vienna, 2012, 27; http://www.unodc.org/documents/data-and-analysis/WDR2012/WDR_2012_web_ small.pdf

6. UNODC, "World Drug Report 2011," Vienna; http://www.unodc. org/documents/data-and-analysis/WDR2011/World_Drug_ Report_2011_ebook.pdf

7. The extent of any links or cooperation between the Taliban and the PKK are outside the scope of this paper, which focuses exclusively on the smuggling and financial aspects of the opiumheroin trade from Afghanistan.

8. Ibid., 83.

9. UNODC, "Addiction, Crime and Insurgency: The Transnational Threat of Afghan Opium," New York, 2009: http://www.unodc. org/documents/data-and-analysis/Afghanistan/Afghan_Opium_ Trade_2009_web.pdf; UNODC, "UNODC reveals devastating impact of Afghan opium," Vienna, 21 October 2009: http://www.unodc.org/unodc/en/frontpage/2009/October/unodc-reveals-devastating-impact-ofafghan- opium.html

10. The lower figure comes from UNODC, "The Globalization of Crime: A Transnational Organized Crime Threat Assessment," Vienna, 2010. The higher figure is from Soner Cagaptay, "Can the PKK Renounce Violence? Terrorism Resurgent," The Middle East Quarterly vol. XIV, no. 1 (Winter 2007): 45-52.

11. David Mansfield, "The Economic Superiority of Illicit Drug Production: Myth and Reality," August 2001: http://www. davidmansfield.org/all.php

12. U. Zerell, B. Ahrens, and P. Gerz, "Documentation of a Heroin Manufacturing Process in Afghanistan," Bulletin on Narcotics vol. LVII, nos. 1 and 2 (2005): 12: https://www.unodc.org/pdf/research/Bulletin07/bulletin_on_narcotics_2007_Zerell.pdf

13. "World Drug Report 2012," 26.

14. Ibid., 82.

15. Ibid., 26, 30.

16. Zerell, Ahrens, and Gerz, "Documentation of a Heroin Manufacturing Process," 11-31.

17. "World Drug Report 2012," 28.

18. Gretchen Peters, "How Opium Profits the Taliban," United States Institute of Peace, Washington D.C., August 2009. When we interviewed her, Ms. Peters told us the Taliban control (protect and tax, not actually operate) all of Afghanistan's heroin labs. Other estimates vary on how many labs there are in total.

19. Benjamin Freedman and Matthew Levitt, "Contending with the PKK's Narco-Terrorism," Policy Watch (The Washington Institute) no. 1611 (8 December 2009).

20. UNODC, "World Drug Report 2012," 27. Of these figures, the report notes: "The proportion of potential opium production not converted into heroin could be estimated only for Afghanistan. For the purpose of this table for all other countries it is assumed that all opium potentially produced is converted into heroin. If total potential opium production in Afghanistan in 2011 were converted into heroin, total potential heroin manufacture would be 829 tons (Afghanistan) and 948 tons (global). The 2011 estimate of "opium not processed into heroin" in Afghanistan was based exclusively on regional seizure data, in contrast to previous years, when information from key informants was also taken into consideration. The 2011 estimate is not directly comparable with previous years."

21. Sedat Laciner, "Drug Smuggling as a Means of PKK Terrorism," Assembly of Turkish American Associations, 12 February 2008: http://www.ataa.org/reference/pkk/Drug-Smuggling-as-Main-Source-of-PKK-Terrorism. html

22. Freedman and Levitt, Contending with the PKK's Narco-Terrorism.

23. A detailed version of this statistical calculation can be requested via the authors' emails: khan@nps.edu; oer@nps.edu.

24. The age range of most heroin users.

25. Gretchen Peters, Seeds of Terror, How Heroin is Bankrolling the Taliban and Al Qaeda (New York: Thomas Dunne Books, 2009) 117.

26. SECI Center Anti-Terrorism Task Force, "Narco- Terrorism: Global and Regional Overview," Anti-Smuggling and Organized Crime Department, Turkish National Police, Ankara, 8 March 2004.

27. Laciner, "Drug Smuggling as a Means."

28. Ibid.

29. A detailed version of this statistical calculation can be requested via the authors' emails: khan@nps.edu; oer@nps.edu.

30. Global Commission on Drug Policy, "War on Drugs," Report of the Global Commission on Drug Policy, Rio de Janiero, June 2011, 4: http://www.globalcommissionondrugs.org/wp-content/themes/gcdp_v1/pdf/Global_Commission_Report_English.pdf

31. "World Drug Report 2012," 26.

32. Ibid., 96.

33. Michael Griffin, Reaping the Whirlwind: The Taliban Movement in Afghanistan (London: Pluto Press, 2001), 153.

34. Soylemez, PKK Finances Terrorism through Drug Trafficking.

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