‘Movie-plot’ cocaine case highlights shipping industry drug problem
On June 17, 2019, US law enforcement agents boarded a shipping vessel when it arrived at the Packer Marine Terminal in Philadelphia and seized 19.75 tons of cocaine with a street value of over $1 billion (CHF920 million). It was one of the largest drug seizures in US history and prompted the company to invest millions in security upgrades.
The vessel in question – the MSC Gayane -– was part of the
fleet of the Geneva-based Mediterranean Shipping Corporation, which handles
about 16% of the world’s seaborne trade, the second-most after Danish-based
Maersk, according to a constantly updated ranking of the 100 largest shipping
operators.
A spokesperson for the US Attorney’s office told
swissinfo.ch that investigations in the US case are ongoing but the company is
not facing charges. A total of eight crew members were arrested and plead
guilty to conspiracy to possess with intent to distribute cocaine.
The sentence against MSC Gayane first mate Bosko Markovic
was handed down on June 10, according to unsealed court documents.
“A smuggling scheme of this magnitude would likely not have
been possible without the [first mate],” said assistant US attorney Jerome
Maiatico. “His role was necessary.” A first mate is generally responsible for a
ship’s cargo and deck crew.
The smuggling case was unprecedented in scale and US law
enforcement response. Customs and Border Protection temporarily seized the
vessel — a ship measuring roughly two city blocks in length— and it was later
released on a $50 million bond. MSC temporarily lost its preferential American
customs inspection status over the case.
The subsequent investigation, the details of which have
emerged in sentencing documents, uncovered a clandestine drug trafficking
operation that US authorities say “read like a movie plot”. Crew members used
encrypted phones to communicate with drug suppliers in South America. The
ship’s crane was used to hoist cargo nets full of cocaine onto the vessel from
speedboats that approached at night.
Widespread problem
Such incidents are not isolated to MSC. Drug trafficking is a headache for all major
container lines, including Maersk. In 2019, UK authorities seized 1.3 tons of
heroine from a Maersk-operated ship. Last year, Mexican authorities found 102.5
kilos of cocaine on a Maersk vessel.
United Nations experts note the illicit drugs trade has been
on the rise in the five-year period leading up to 2019 and that drug barons
appear to be taking larger risks, sending more cocaine at one time. The
Americas had 17 high-profile drug seizures in 2020, followed by Europe with 13,
according to the International Chamber of Shipping. Most of the cases involved
cocaine hidden in cargo as varied as rice, bananas and coal.
“The illicit drug trade is disruptive and costly to shipping,”
says John Stawpert of the International Chamber of Shipping, which represents
more than 80% of the world’s merchant fleet and issues regular guidelines on
combatting drug trafficking. He declined to comment on the MSC Gayane case
directly.
“Regrettably, what accounts for its existence is the demand
for supply,” Stawpert told SWI swissinfo.ch. “Nine out of ten goods in your
home were transported by sea, and because of this scale and scope it is an
attractive mode for drug traffickers, despite government’s and industry’s
ongoing efforts to curb this crime.”
Cocaine is the second-most consumed drug in the European
Union after cannabis products.
Antoine Vella, a researcher focused on cocaine trafficking
at the United Nations Office on Drugs and Crime (UNODC), points out “the use of
merchant vessels including containers for movement of cocaine has become the
primary mode for traffickers targeting the European market". The MSC
Gayane had been due to dock at the Dutch ports of Rotterdam, Antwerp and France’s
Le Havre.
Vella notes there are many ways that drugs can be planted on
board a vessel without a company realising. The most common is the “rip-on,
rip-off” method in which containers are unsealed and then resealed to smuggle
drugs, usually in the dock area at the port of departure. Complex webs of
criminal organisations and corruption by port and other authorities add to the
problem.
The Covid-19 pandemic with its quarantines and restrictions
has complicated efforts to tackle the issue. Consumer demand has led to a surge
in container shipping, according to the United Nations Conference on Trade and
Development, which notes in an April policy brief that “container freight rates
have reached historical highs”.
What is Switzerland's role?
Landlocked Switzerland is home to a constellation of
shipping companies who find it convenient to be based in commodity trading hubs
like Geneva. Swiss authorities, however, only have jurisdiction over cases
involving vessels travelling under the country’s flag. The MSC Gayane was
registered in Liberia.
“Switzerland does not have ports on the oceans, and it
cannot prevent its companies’ vessels being flagged under other countries, so
it is limited in how it can directly intervene,” says Vella. “In terms of
shipping good practice, there should ideally be a strong link between the flag
of the country and the ship.”
For its part, the Mediterranean Shipping Company, an Italian
family-owned business headquartered in Geneva, says it was a victim of criminal
conspiracy conducted by its crew in the MSC Gayane case. In a March 29 victim
impact statement to a Philadelphia court, the shipping giant described the
incident as an “unwanted and undeserved stain” on its record.
In the impact statement, MSC also noted its robust
anti-smuggling policies and says it conducts vessel searches for drugs upon
leaving a port as well as before entering a US port. It pointed out that visa
requirements gave US authorities an opportunity to conduct background checks of
the crew members. The company said it cooperates closely with US law
enforcement authorities.
Following a series of drug-related incidents, the shipping
company also disclosed plans to make $100 million worth of security enhancements
by 2024. Also in 2019, US authorities found half a ton of cocaine on board MSC
Desiree and 1.5 tons of cocaine on the MSC Carlotta. Earlier this year,
Australian authorities seized 200 kilograms of cocaine aboard the MSC Joanna.
An MSC spokesman declined to comment on the MSC Gayane case
but stressed the company has "zero tolerance for the abuse of its services
through criminal activities, including drug trafficking" and that it
implements robust security measures including cameras and fences, as well as
providing a whistleblowing process for seafarers to report suspicious
activities.
The Swiss Shipowners Association, which has seven members
including MSC and represents more than three-quarters of the fleet operated
from Switzerland, declined to comment discuss the challenges faced by the
industry when it comes to drug trafficking. The Swiss Trading and Shipping
Association says companies try to hire professional crews to avoid
problems.
More government oversight?
Swiss criminal law expert Mark Pieth believes the Alpine
nation’s government should play a larger role in overseeing the shipping
industry. He says the concealment of illegal goods is just one issue facing the
sector, with others including environmental and labour abuses. Pieth says those
smuggling drugs aboard vessels rarely get caught, and that a sting operation
like the one orchestrated by US authorities is even more rare.
“There are these extremely short turn-around periods in port
which impede law enforcement from finding out,” explains Pieth, who teaches at
Basel University and is writing a book about the shipping industry. “They would
[only] find out if they are tipped off, if there is an undercover operation, or
simply by chance.”
Law enforcement expert Bob Van den Berghe of the UN Office
on Drugs and Crime says that only 2% of the 750 million containers moved around
the world every year are inspected. Consumer demand amid the Covid-19 pandemic
has led to a surge in container shipping, according to the United Nations Conference
on Trade and Development, which notes in an April policy brief that “container
freight rates have reached historical highs”.
The Swiss government, meanwhile, says it is doing its part
to address drug trafficking through participation in international bodies such
as the International Maritime Organization and Interpol. It has ratified the
Convention for the Suppression of Unlawful Acts against the Safety of Maritime
Navigation and implements the International Ship and Port Facility Security
Code, as Switzerland’s Rhine ports provide a connection to the sea.
Incidents like the MSC Gayane are costly and embarrassing
for the shipping industry, says Pieth. But he admits there is only so much that
companies can do to protect themselves from criminal enterprises given the
nature of container shipping and the complexity of supply chains involved.
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