The Great Debate

The color of money shouldn’t be blood red

HSBC’s $1.92 billion payment to U.S. authorities to avoid prosecution for money-laundering practices, including transferring funds for Mexican drug cartels, raises serious questions about the flow of narco-cash in the international banking system. The time has come to tackle the culture of impunity that allows these illegal transactions.

The illicit drug trade remains international organized crime syndicates’ most lucrative source of income. Drug traffickers may be laundering up to 70 percent of the estimated $320 billion they make from illicit drugs annually, according to United Nations Office of Drugs and Crime (UNODC). Yet officials have been able to seize less than 1 percent of this.

In Central America, for example, we have all seen the effects of crime and drug trafficking. When criminals fight, it is innocent bystanders who often die. The homicide rate in El Salvador is 69 killings per 100,000 citizens; in Guatemala it is 39 per 100,000; and in Honduras it is 92 per 100,000. By contrast, in Great Britain, the homicide rate is roughly 1.2 per 100,000.

Shutting down the cartels’ cash flow could deal a significant blow to their operations and help rein in their lethal power. In 2010, UNODC put the value of the U.S. cocaine market at around $33 billion, closely followed by the European market at $31 billion.

But our efforts will come to nothing if implementation is ineffective, compliance is inadequate and vigilance poor. When legal and institutional weaknesses are exploited, effective regulation is crucial. Without this, sophisticated criminals can always find ways to push dirty money into the legitimate financial system.

“Lawless hordes” and the U.S.-Mexico border

Bernd Debusmann- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -

On the first Sunday of October, the Texan city of El Paso recorded its 10th murder of the year. On the same day, El Paso’s Mexican sister city, Ciudad Juarez, recorded its 1,809th murder of 2009. Mayhem on one side of the border, relative peace on the other.

The contrast is stunning. According to an annual ranking compiled by CQ Press, a Washington publishing house, El Paso is the third-safest large city in the U.S. (after Honolulu and New York). According to a Mexican think tank, Ciudad Juarez became the world’s most violent city this year, torn by a vicious free-for-all involving warring drug cartels, hit squads, common criminals, and the military.

The two cities form a sprawling metropolitan area of some 2.5 million, divided by a river and a border fence; united by family and business ties, history and now a shared fascination with Ciudad Juarez’s gradual descent into criminal anarchy. El Paso’s citizens follow the bloodletting across the river with rapt and horrified attention.

Criminal anarchy on America’s doorstep

Bernd Debusmann-Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -

When Mexico’s president, Felipe Calderon, ordered 2,500 troops and federal agents into border city Ciudad Juarez 17 months ago to tamp down drug violence, the monthly murder rate ran at an average of 66. In retrospect, those were the days of peace and calm.

Ciudad Juarez has become the most active front in simultaneous and increasingly bloody wars. One is between drug cartels fighting each other for access to the U.S. market. Another is between drug traffickers and Mexican authorities charged with imposing law and order. They have been singularly unsuccessful.

Despite a vastly increased military presence (now about 7,000, plus 2,500 federal agents), the monthly body count this year has averaged more than 180 a month. In August, the body count exceeded 300, a record. According to a study published in August by a Mexican non-profit group, the Citizen Council for Public Security and Justice, Ciudad Juarez (population 1.6 million) has become the world’s most violent city.