1. M.A Economic Governance and Development
Economy of Border Management and Transport Routes
Smuggling and FDI Bad Practices
by
Zabihullah Mudabber
Sharifullah Danesh
Under the Supervision of
Jonathon Hornbrook
3. Smuggling
Smuggling is the secret movement of goods
across national borders to evade customs
duties or import or export restrictions.
Smuggling is the illegal transportation and
distribution of objects, information or people
across national or international border, in
violation of applicable laws or other regulations.
Smuggling is the evasion of excise taxes on
goods by circumvention of border controls
Background Information
What is Smuggling?
4. Tariff Barriers:
Tax Difference among neighboring countries.
High Import /Export duties and excise taxes
Non-Tariff Barriers:
Administrative Barriers to Trade (ABT)
Cumbersome customs procedures
Lack of efficient employment option (no Singe Window)
Lack of Single Administrative document (SAD)
High Corruption within the custom departments
Technical Barriers to Trade (TBT)
Reluctance to obtain quality standards and certifications
Policies for Domestic protection
Restrictions, Quotas
Why Do People Smuggle?
Smuggling Background Information
5. How many Types of Smuggling Do you Know?
Smuggling of Objects
Contraband of legal Goods
Shuttle Trade
Trade of Illegal Goods
Smuggling of People
Human Trafficking of any kind
Migrant Smuggling
Smuggling of Information
Online smuggling, hacking banks
Typology of SmugglingSmuggling
A Typology of Smuggling
6. How legal goods are circumvented in the border controls to evade
custom duties. (How legal goods are going through black channel)
Typology of SmugglingSmuggling
1.1 Contraband of Legal Goods
Circumvention of border controls.
Under billing of prices of the goods in custom.
Under billing of the quantity of the goods.
Or either Overbilling of the prices and quantity of goods.
Tax exempted Goods are re-sold in the local Markets
Power-Interest Group/Patronage
7. Following are major legal goods people smuggle through out
the regions from different destinations.
Typology of Smuggling
Central Asia
Fuel
Car
TV Sets
Cell phones
Garments
Cigarettes
Foreign currency
Gold and Jewelry
$ 2.7 billion/year
Afghanistan
Grain & Food
Items
Garments
Medication
$ 2.5 billion/year
Iran
Gold
Artifacts
Home appliances
Cell phones
Computers
Cosmetics
Cigarette
$ 3 billion/yr
Pakistan
Petroleum
Medications
Cigarettes
Auto parts
electronics
Cosmetics
Footwear
Others
$ 2.8 billion/yr
Smuggling
Major Legal Goods Smuggle
8. Fuel Case of Kyrgyzstan
30 – 40 tons Trafficked Daily
profit US$ 40-50 million annually
Smuggling
Typology of Smuggling
22 Criminal Proceedings by Gov
Is it Still going on?
9. Smuggling
Fuel imports for the use of
NATO in Afghanistan is tax
exempted
When there were 160,000
foreign troops AFG used to
import 900 Million liters
without paying any taxes and
custom duties.
Now, there are 16000 troops
AFG is still importing 900
million liters without paying
any custom duties!
Typology of Smuggling
Fuel Case of Afghanistan
11. Smuggling
Shuttle trade refers to the activity
in which individual entrepreneurs
buy goods abroad (usually on a
Cheaper price) and import them for
resale in street markets or small
shops (on a Higher price).
Usually small amount, not eligible
for custom. Goods are being
imported and exported as general
visitor, migrant returnees etc…
through
Typology of Smuggling
1.2 Shuttle Trade
13. Smuggling Typology of Smuggling
Only 6 out of 30
routes are under
control of Customs
department in
borders with
Pakistan .
Major Informal and
Shuttle Trade take
place with Pakistan
Afghanistan Informal Trade reaches 2.5 bn $
20. Smuggling
Narco Market Value:
Do you know How much is the M.V of Illegal Trade of Drugs?
Typology of Smuggling
Annual estimated ≈ 400 billion US Dollars
Global Market 2005
13 billion in Production Level
94 billion in Wholesale Level
320 billion in Retail Level
45 billion is traded so far in 2016
3000$ 16000$
https://data.unodc.org/sys/rpt?reportfile=cannabis®ION=__ALL®ION__label=All&SUBREGION=__ALL&SUBRE
GION__label=All&COUNTRY=__ALL&COUNTRY__label=All&DRUG=__ALL&DRUG__label=All+%285%29&format=html
&fullscreen=true&showtoc=true#state:0
22. Afghanistan opium production (bln $)
Afghanistan
Produces around
68 billion dollars
worth Opium.
4% stays within
Afghanistan, the
rest flows to the
rest of powerful
interest groups.
Smuggling
Typology of Smuggling
32. Graph: S#26
War has always been about
resources and control.
Taliban had successfully
eradicated the opium crop in
the Golden Crescent before the
US invasion.
Taliban opiate production stood
at 185 tons, Which increased
to 3400 tons in 2002 which is
immediately following the
October 2001 invasion.
Now, more than 90% of the
world’s heroin comes from the
war torn country
The War on Drugs
Smuggling
34. Smuggling
Arm Trafficking
The War on Drugs
The collapse of
the Soviet Union
The rise of
Terrorist groups
Integration of
Terrorist groups
35. Smuggling
Arm Trafficking Routes
The Route which is used for the
supply of drug is also used to fulfill
the demand for weapons
Re-imbursement of the supply of
Drugs.
(Weapons are bartered in return to
the supply of drugs)
The War on Drugs
37. Anti- Smuggling Projects
Smuggling
Eradication Projects
Governments and International Community has taken steps to
eradicate and fight against any kind of smuggling through out
financing and implementing various projects around the world.
The Projects Include:
Training Anti-Narcotic Units
Training of Border Police
Improve Customs department
Institutional Development
Public Awareness
Health Initiatives
Agriculture projects to substitute Opium in Afghanistan
International and Regional Cooperation
38. Alternative Development Program
Smuggling
Eradication Projects
Project funded by: USAID
Total Fund: 75 Million
Project Scope: to reduce poppy cultivation
Project Location: Eastern Region, Afghanistan
Duration: 2005 - 2013
Generating more than 17,584 full-time jobs
Trained 118,414 farmers, government representatives,
associations, and business owners.
Trained 2,500 women in livestock husbandry; 4,599 in
business skills; and 3,835 in improved agricultural practices.
rehabilitated 603 kilometers of roads and 2,726 kilometers of
irrigation canals.
39. Agricultural Credit Enhancement Program (ACEP)
Smuggling
Eradication Projects
Project funded by: USAID
Total Fund: 100 Million USD
Project Scope: to reduce poppy cultivation
Project Location: 4 regions Including Central
Duration:
Employing more than 100 professionals
ACE I established the Agricultural Development Fund (ADF).
Direct beneficiaries 31,000 small commercial farmers in 33
provinces, indirect exceeds 150,000
40. Border Management Program in Central Asia
(BOMCA)
Smuggling
Eradication Projects
Project funded by: EU
Total Fund: 33.6 Million Euro
Project Scope: Adoption of Modern Border Mangmt
Project Location: Central Asian Countries
Duration: 2003- 2014
Adoption of Integrated Border Management (IBM).
Training of Inspection of Officers and Border employees
Advanced Trainings for airports, railways staffs
Establishment of connections between the countries.
41. Central Asia Drug Action Program (CADAP)
Smuggling
Eradication Projects
Project funded by: giz, Ministry of Public Health
Total Fund: 20.7 Million Euro
Project Scope: Drug Prevention, Policies, MIS…
Project Location: Central Asian Countries
Duration: 2010- 2013 in a different phases
CADAP is assisting Central Asian countries in their policies
and measures aimed at reducing the demand for illegal drugs
substances.
42. Other Ongoing UNOCD Projects
Smuggling
Eradication Projects
GLO/G80 - "Container Control Programme (CCP) -
Turkmenistan Segment“
GLO/Y09 - "Paris Pact Initiative, Phase IV: A Partnership To
Combat Illicit Traffic In Opiates Originating In Afghanistan
RER/H22 - "Establishment Of The Central Asia Regional
Information And Coordination Center" (CARICC)“
RER/V10 - "Sub-Programme 4 Of The Regional Programme
On Afghanistan And Neighboring Countries - Trends And
Impacts"
https://www.unodc.org/centralasia/en/ongoing-projects/drug-trafficking-and-border-control.html
Hinweis der Redaktion
Кош келиңиз (Kosh kelingiz!) = Welcome
Кандайсың?
Custom Clearing Agents
In fact, in Batken prices for petroleum products were by 3-5 soms higher than in other regions. In neighboring Tajikistan in the border areas prices are higher by 15-20 soms for certain types of fuel, and close to the Afghan border, in Dushanbe, gasoline costs 30-35 soms more. Naturally, the fuel, which flows into the Batken region, partly exported to Tajikistan, resold. Those who have worked on this, with a liter had their 10-12 soms.
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На самом деле в Баткене цены на ГСМ были на 3-5 сомов выше, чем в остальных регионах. В соседнем Таджикистане в приграничных районах цены выше на 15-20 сомов на отдельные виды топлива, а ближе к афганской границе, в Душанбе, бензин стоит на 30-35 сомов дороже. Естественно, ГСМ, которые поступали в Баткенскую область, частично вывозились в Таджикистан, перепродавались. Те, кто этим занимался, с литра имели свои 10-12 сомов.
The Fuel Case of NATO overcharged by £460m (700 million USD) for fuel during Afghan war
Ministry of Defense is Investigating:
Analytical Reasons for Increase and Decrease:
NATO is leaving
18.3 kilograms per hectare, which was 36% less than in 2014 (28.7 kilograms per hectare).
In 2012-2013-2014 (it increased by 36 Percent)
From Area under opium poppy cultivation decreased by 19%
Seized percentage is very low compared to the smuggled amount.
3,1% in 2006 (total 118 metric ton heroin smuggled to CA and only 3.1% seized = 3651 kg
UNODC estimated that in 2006, 118 metric tons of heroin were smuggled through Central Asia
via the “northern route”. Of the estimated amount smuggled, only a fraction (3.1 percent or
3,651.2 kg) was seized in Central Asia. Of this amount, Kazakh law enforcement agencies
seized 554.7 kg, Kyrgyz law enforcement agencies seized 260.8 kg, Turkmen law enforcement
agencies seized 201.1 kg and Uzbek law enforcement agencies seized 537.1 kg. Tajik
authorities, however, seized almost 4 times the amount of other Central Asian countries at
2,097.5 kg.
https://www.youtube.com/watch?v=wQFy9BFQEyM
https://www.youtube.com/watch?v=qME6Ta9InY4
The Afghan Border Police divides command of its 23,000 police force across 6 zones to protect 14 Border Crossing Points and 5 Major Airports
Kunar – Bajaur of Pakistan
As a result of the large quantity of firearms in circulation, several states in theregion have become concerned about the trafficking in weapons into their territory.Kyrgyzstan is particularly worried about weapons coming into the country fromTajikistan. Some of these weapons move along the old Silk Road from Ishkashimthrough Gorno-Badakhshan via Khorog and Murghab to Osh. Another route runsfrom central Tajikistan to the Kyrgyz districts of Leilek and Batken and then to Oshand Bishkek.