On November 1, the deputy director of Finland’s National Bureau of Investigation played down remarks made on October 30 by an agency official who warned of Western weapons bound for Ukraine being smuggled into Finland, Sweden, Denmark and the Netherlands. Nonetheless, the affair generated significant attention and reflected previous concerns expressed by European authorities over Ukraine’s vulnerability to organized crime and the repercussions for the continent.
Organized crime emerged as a potent force in Ukraine after the Soviet Union collapsed in 1991. Criminal groups exploited flawed economic privatization measures to amass significant economic power, while the collapse of the Soviet security state allowed armed criminal factions to replace government authority and entrench themselves permanently.
These developments were mirrored in many former Soviet states in the 1990s, including Russia. But after Vladimir Putin assumed the Russian presidency in 2000, he and his allies in the intelligence community re-established a strong security apparatus and clamped down on many domestic organized crime syndicates.
However, the Kremlin chose not to eradicate them completely. Wary of further violence, Putin sought to consolidate power rather than risk a return to the instability that characterized Russia in the 1990s.
And perhaps more important, criminal groups could provide Moscow with unique opportunities. By turning a blind eye to much of their activity and legitimizing their wealth and businesses, the Kremlin gained access to illegal profit-making schemes, extensive smuggling networks, manpower, and other illicit services.
The Kremlin also expanded cooperation with criminal groups across the former Soviet Union. In Ukraine’s southeast, where criminal activity has been most concentrated, Russian intelligence figures have cultivated relationships for decades, with many of Crimea’s high-end criminal businesses dependent on relations with Russian criminal networks to survive.
Criminal links in Ukraine, Crimea
Organized crime in Ukraine had also evolved significantly by the time Putin entered office. In 2006, a US Embassy cable stated that Crimean criminals were “fundamentally different than in the 1990s: Then, they were tracksuit-wearing, pistol-wielding ‘bandits’ who gave Crimea a reputation as the ‘Ukrainian Sicily’ and ended up in jail, shot, or going to ground; now they had moved into mainly above-board businesses, as well as local government.”
These developments allowed Moscow quickly to assume political control over Crimea when Russian forces seized it in 2014. Dozens of pro-Russian politicians elected to Crimean political offices, including the Crimean Prime Minister Sergei Aksyonov and Speaker of the Crimean Parliament Vladimir Konstantinov, shared suspected ties to organized crime.
In Ukraine’s Donbas region, the “density of criminality, combined with the weakness of local institutions” similarly allowed criminal groups to amass significant economic and political power after the Soviet collapse.
But after the launch of Russia’s proxy war in the region alongside the seizure of Crimea in 2014, Donbas criminal groups also provided much of the manpower for newly created militant groups and attempted to recruit others in neighboring Ukrainian regions to take up arms against government forces.
Despite their higher density in Crimea and the Donbas, Russian-supported criminal groups operate across Ukraine and the Black Sea region. Speaking with Mark Galeotti, an expert on modern Russia, in 2019, a Bulgarian security officer detailed a smuggling operation through Bulgaria’s port of Varna, bringing in drugs and counterfeit goods from Ukraine’s port of Odessa.
Operated by “Ukrainians working for a Russian-based gang,” the Bulgarian officer believed the criminal group was being taxed by Russian authorities and was “feeding information on Odessa” back to the Kremlin.
The threat of Russian-backed organized crime has only grown since the invasion in February. Conflicts generally tend to weaken state capacity, or the ability of governments to function properly, allowing organized crime groups to increase their power and influence. The Kremlin has expanded its use of criminality both to weaken Ukraine and to complement its own war effort.
Danger to Western Europe
While reports of Ukrainian criminal groups smuggling Western weapons out of Ukraine have been consistently downplayed, it would be in the Russian government’s interest to dilute the effectiveness of Western military aid. Additionally, many weapons successfully smuggled out of Ukraine will likely end up in Europe, with weapons from Eastern Europe having been used in several terrorist attacks over the last decade.
“Just beyond the countries of Western Europe, with their restrictive gun laws, lie the Balkan states, awash with illegal weapons left over from the conflicts that raged there in the 1990s,” Time magazine stated.
In April, Ukrainian officials also accused Russia of smuggling weapons into Ukraine from the Moldovan breakaway region of Transnistria in an effort to arm local allies, as well as using smugglers to bring in sanctioned weapons and military technology for the Russian military via Georgia.
Economic sanctions have in turn forced the Kremlin to expand its criminal profiteering activities, according to Western intelligence and law-enforcement officials who spoke with Vice World News.
A report by the UN Interregional Crime and Justice Research Institute mentioned an incident in April where the “Ukrainian Ministry of Justice officials charged a Ukrainian individual with helping a Russian business to launder money using a Cypriot company, registering their accounts into a private bank in Ukraine.”
Meanwhile, a metal shipment worth more than US$3 million was intercepted before it could leave a port in Ukraine’s Odessa region.
Smuggling and sanctions evasion
On top of existing, lucrative tobacco-smuggling networks, NATO and European Union officials believe that a large tobacco-smuggling ring in Belgium exposed in September was sponsored by both Belarusian and Russian intelligence to raise funds for their operations in the face of sanctions.
Russian and Belarusian state-controlled industries have similarly increased cooperation with criminal groups to export oil, gas, and counterfeit goods to bypass sanctions.
Since the beginning of the Russian invasion, European security officials have also noted a rise in drug smuggling to Europe through the northern route from Afghanistan through Central Asia and Russia – likely due to Moscow easing restraints on these activities.
Taxing the drug trade allows Russian government entities to raise cash. But as with guns, flooding Europe with drugs creates its own problems. Court systems, prisons, hospitals, and other state and social institutions could be overwhelmed by increased drug flows, while distribution fuels local criminal activity – similar to Washington’s concern over Chinese drug trafficking to the US.
Additionally, Russia has turned to Central Asian smugglers to gain access to essential sanctioned products from abroad, while the Kremlin may explore selling Russia’s vast gold reserves on the international black markets depending on the compounding effects of sanctions.
And after the West’s decision to freeze much of Russia’s foreign-exchange reserves and other financial assets, Russian criminals, in coordination with the Kremlin, have turned to cryptocurrencies to help raise funds and evade sanctions. Criminal hacking groups have also been used by Moscow to help launch cyberattacks on Ukrainian and Western targets.
Notably, the Russian government has taken steps in recent months to institutionalize illegal activity further among Russian companies. In March, the Kremlin legalized “parallel imports,” allowing Russian companies to import commodities into the country without the consent of the overseas producer.
Though often innovative, the Kremlin’s embrace of organized crime underlines Russia’s sense of desperation as the most sanctioned country in the world. Yet Russia poses a greater challenge than other sanctioned states such as Venezuela, Iran or North Korea. Its relatively large, industrialized economy, natural resources, extensive borders, and economic integration with Eurasia make isolating it far more difficult.
Continued collaboration with organized crime will be essential for Russia to safeguard its economy and prolong its war effort. Despite the risks of greater integration with the underworld and a growing dependency on their illicit networks, the Kremlin will continue these policies so long as sanctions remain in place.
Encouraging the growth of organized crime in Ukraine also has its own benefits for Moscow. Domestic criminal groups have helped Ukrainian men seeking to avoid conscription to leave the country, reducing the manpower available to Kiev. In addition, sustaining Ukraine’s entrenched criminal culture and corruption prevents its further Westernization through economic and political reform.
Western law-enforcement agencies have attempted to increase cross-country coordination with Ukraine to stem Russian-backed organized crime since the outbreak of the war.
The European Multidisciplinary Platform Against Criminal Threats (EMPACT) gathered in April to discuss the situation, while entities such as Interpol, Europol, Frontex and others have increased cooperation with both Ukraine and Moldova in recent months in “fighting serious and organized crime.”
The fight against Russian-backed organized crime clearly remains essential to Ukraine’s war effort. But as Kiev has observed since the 1990s, just as much attention should be paid to how organized crime in the country will continue to evolve once large-scale fighting subsides.
This article was produced by Globetrotter, which provided it to Asia Times.