The EU’s Ports Strategy should focus on disrupting global hubs of illicit trade

Europe’s major ports have served as global trade gateways for decades, ushering in an era of unparalleled wealth and economic expansion for the continent. 

Yet, unfortunately, these gateways have also facilitated the influx of illicit goods and contraband — from dangerous illegal drugs and weapons to counterfeit vehicle parts, pesticides, cigarettes and pharmaceuticals — posing a huge challenge to the public security of European governments and the EU at large.

As the European Commission unveiled its ambitious strategy to combat drug trafficking within Europe’s ports, it was no surprise that Rotterdam and Antwerp were identified as major pathways for an array of illicit products. 

“Criminals use logistic hubs in the EU and non-EU countries to carry out their illegal activities,” the European Commission’s roadmap to build the European Ports Alliance warned.

In the meantime, Experts tracking illicit trade patterns at the International Coalition Against Illicit Economies (ICAIE) and strategic evidence-based research at Terrorism, Transatlantic Crime and Corruption Center (TraCCC) have zeroed in on the issue in a new report. 

Its conclusions highlight at least four “hubs of illicit trade” which act as significant global logistics and distribution conduits for illegal trade and related money laundering that help finance greater criminality and terrorism.

The case of a ship carrying two tonnes of cocaine

Panama and the UAE, two of the hubs of illicit trade highlighted in the TraCCC-AITI report, stand out as two of the most problematic from the European perspective. 

Astonishingly, almost 2 million containers — 58 million tonnes of goods — make their way from Dubai’s Free Trade Zones (FTZs) to the EU each year, with an additional 500,000 originating from FTZs in Panama. Rotterdam and Antwerp are the biggest entry points, handling 30% of the total traffic.

In October 2023, the MV Matthew, a ship loaded with two tonnes of pure cocaine, was seized off the coast of Ireland following a pan-European operation. 

Flying the flag of Panama, but with a website registered in Dubai, the ship attempted to deliver illegal drugs — valued at nearly €200 million, to Europe from Guyana. 

The lack of financial regulation in these jurisdictions, combined with the lack of scrutiny and enforcement of laws in FTZs is what attracts criminal entrepreneurs and illicit networks to export their criminality.

Only 2% of containers arriving in Europe searched by authorities

The Free Trade ports in Dubai are the point of origin for illicit cigarettes smuggled across the so-called “Maghreb route,” which connects countries in the Middle East and northwestern Africa with Europe. 

These and other illicit products find their way through North Africa to France, Italy, and Spain. 

Every year, billions of cigarettes come to Europe through this route, siphoning billions of euros of tax revenue from governments.

Alarming as it is, Europol reports that just 2% of containers arriving in Europe’s ports are searched by authorities. This means that only a fraction of the illegal products entering Europe can ever be successfully seized. 

In this context, the EU’s Ports Strategy would benefit from paying particular attention to the cross-border flow of illegal and counterfeit products arriving in Europe from Dubai, Panama, and other identified “hubs” and illicit routes focused in our TraCCC-AITI report.

Clamping down on FTZs key

While the EU Ports Strategy is poised to enhance technological collaboration and bolster authorities’ abilities to intercept illegal shipments, the most meaningful interventions in the global black market would be to disrupt these “hubs of illicit trade” through intelligence-sharing across borders.

Meaningful action to clamp down on Free Trade Zones will have a far greater impact in stopping illegal and counterfeit products from reaching Europe, and strengthening collective security across global markets and supply chains including the effective implementation of the OECD “Recommendation on Countering Illicit Trade: Enhancing Transparency in Free Trade Zones”. 

Through dynamic public-private partnerships, critical market stakeholders must work together with the UAE, Panama, and other countries to promote cleaner trade and to counter illicit trade around the world.

David M. Luna is a former US diplomat and the Executive Director of the International Coalition Against Illicit Economies (ICAIE), Co-Director of the Anti-Illicit Trade Institute (AITI) at the Terrorism, Transnational Crime and Corruption Center (TraCCC) at George Mason University, and Chair of the Business at OECD Anti-Illicit Trade Expert Group (AITEG).

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