How The Ukraine Conflict Is Extremely Profitable For Gangsters

by John Haltiwanger

Since the crisis in Ukraine began last November, the country has essentially been split in two. Much of the country favors further European integration, while the rest is decidedly pro-Russian.

In March, Russia annexed the Ukrainian territory of Crimea. Subsequently, in April, pro-Russian separatists began taking over territory in eastern Ukraine, prompting violent clashes with the government. The rebels now control a significant amount of territory.

Since the fighting began, more than 4,000 people have lost their lives, including 238 people who died when a commercial airliner was shot down over Ukraine in July.

Concurrently, it's believed that Russia has continued to supply and support the separatists, despite denials from the Russian government.

In September, the Ukrainian government and pro-Russian rebels agreed upon a ceasefire. Over the weekend, however, there were reports of shelling around the eastern city of Donetsk. Accordingly, there are fears that the ceasefire won't last. It's also believed that Russian troops are returning to the area.

It has been an exceptionally complicated year for Ukraine. Correspondingly, relations between Russia and the West haven't been this tense since the Cold War.

All the while, organized crime groups are taking advantage of the pandemonium.

Organized Crime Groups Are Profiting Off The Chaos In Ukraine

Organized crime has been intricately involved in the Ukraine crisis from the very beginning. From the start, local gangsters have been at the center of the violence and the money.

Mark Galeotti is a leading expert in transnational crime and Professor of Global Affairs at New York University. As he explains, much of this is tied to the collapse of the Soviet Union, and goes all the way back to the 1990s.

When the Soviet Union fell, it created a power vacuum out of which a number of poorly-governed states emerged. This fostered an environment in which organized crime could flourish and become deeply embedded within the system.

Since that time, Russian and Ukrainian crime groups have had close ties. In many ways, the current crisis has emboldened these connections.

Relatedly, as Galeotti notes:

The governing elite there [in Ukraine] have close, long-term relations with organized crime. Likewise, in eastern Ukraine, criminals have been sworn in as members of local militias and even risen to senior ranks, while the police, long known for their corruption, are fighting alongside them.

In essence, Ukraine is a tremendously corrupt place, where politicians and mobsters have often had mutually beneficial partnerships. Consequently, when the crisis began, it created even more opportunities for them to do business.

Crime has already increased, as racketeering, drug sales and "raiding" are on the rise. "Raiding" is the process by which property is seized with fake documents obtained by bribing a judge.

Moreover, organized crime groups are also looking to profit off Russian development funds flowing into Crimea through both fraud and embezzlement. This year alone, the funds coming in could amount to $4.5 billion.

What's more, organized crime groups around the world also stand to gain from the chaotic situation.

The Russian Mob Smuggles Drugs, Guns And People Through Ukraine

Odessa, one of Ukraine's largest cities, has been a well-known hub of smuggling for many years. In fact, one might characterize it as the heart of global trafficking for Russian organized crime.

Drugs, guns and people are among the numerous illicit commodities brought through Odessa from all over the world. As Galeotti puts it:

These days, the Ukrainian port of Odessa is the ​smugglers' haven of choice on the Black Sea. There's Afghan heroin coming through Russia and heading into Western Europe through Romania and Bulgaria, stolen cars coming north from Turkey, unlicensed Kalashnikovs heading into the Mediterranean, Moldovan women being trafficked into the Middle East, and a whole range of criminal commodities head out of Odessa Maritime Trade Port.

Indeed, this Black Sea city has made trafficking an extremely lucrative industry for organized crime groups. Even Latin American cocaine is brought through Odessa.

Moreover, due to the fact that a cut of the profits has always gone to Ukrainian politicians, these criminals have been able to operate without much trouble.

Yet, the situation in Odessa could change as a consequence of the current Ukraine crisis. As noted, Crimea, which is also located on the Black Sea, is now under Russian control. Accordingly, Sevastopol, a Crimean city, could potentially become the new hub of smuggling for Ukrainian and Russian organized crime groups.

The Russian Black Sea Fleet is located in Sevastopol. Relatedly, as Mark Galeotti explains, "military supply convoys — which are exempt from regular police and customs checks — are a cheap and secure way to transport illicit goods." Furthermore, the criminal groups in Sevastopol are just as connected, if not more so, with local politicians.

Simply put, it would be a lot cheaper to smuggle through Sevastopol than Odessa, providing a more lucrative opportunity for organized crime groups.

This could have a number of implications. Firstly, with a lot of money at stake, it might lead to violence between competing groups. Additionally, this could mean increased organized crime in the rest of Ukraine and, in turn, the rest of Europe.

In fact, this is already happening. European police have reported increased instances of smuggling. Likewise, as Galeotti highlights, "Latin American cocaine, Afghan heroin, and even cars stolen in Scandinavia are being re-exported through Ukraine into Greece and the Balkans."

Moreover, there have also been reports of commodities being smuggled by military supply ships into Crimea. In one of the most disconcerting examples, it appears that oil illegally sold by ISIS and smuggled through Turkey made it to Sevastopol to be re-exported.

Hence, this isn't just impacting Ukraine, it has global implications. Criminal enterprises from around the world are taking advantage of the situation.

Ukraine is industrialized, developed and located at the crossroads of Europe and Asia. With the combination of its lackluster government, corrupt officials, inadequate police force and the current political crisis, it's essentially a playground for the mob. Until the corruption is eliminated, it appears that this situation will only continue to get worse.