Evolution of Organized Crime in Bulgaria Center for

Evolution of Organized Crime in Bulgaria Center for the Study of Democracy 2005

Organized Crime in Transition Countries – the Case of Bulgaria § § § § § Organized Crime Activities Structure of Organized Crime Corruption The use of violence or threats to use violence Age of the OC structure Conspiracy Establishing market monopoly Division of labor Internal rules and sanctions in organized crime groups

Organized Crime in Transition Countries – the Case of Bulgaria § § § § § Organized Crime Activities Structure of Organized Crime Corruption The use of violence or threats to use violence Age of the OC structure Conspiracy Establishing market monopoly Division of labor Internal rules and sanctions in organized crime groups

Organized Crime in Transition Countries – the Case of Bulgaria Specificities of organized crime activities in Bulgaria, just like in Russia: § Protection § Arbitrage of business conflicts Organized crime developments : § From violence towards investments and corruption § From small structures towards large hierarchical structures

Origin and history of organized crime in Bulgaria § § § Former sportsmen, security services officers, and criminals 1991 – robberies and racketeering 1991 -1992 – protection of business entrepreneurs and smuggling of regulated goods 1992 -1994 – smuggling of embargoed goods into former Yugoslavia, nationwide racketeering schemes Introducing the insurance racket VIS-2 и SIK

Origin and history of organized crime in Bulgaria Corruptio Organizatio Violence n n Market Origin Sporadic Chaotic None 1991 -1992 Widesprea d Chaotic Widesprea d, coordinate d Low-level Primitive policemen hierarchies Sporadic, protection Mid-level, National prosecutio level n Control over some markets 1992 -1994 Private Security Companies Neighborho No od based participatio n

Organized Crime Hierarchies Cressey- Mafia Stricture V. Volkov- Russian Stricture

Organized Crime Hierarchies and Corruption V. Volkov- Russian Stricture Bulgarian Stricture

The Changing Nature of Organized Crime in Bulgaria § § § The end of the Yugo-embargo and the ban of crime-related insurance companies Transition to networks and “grey import” Legalizing businesses and investing black market profits Control over domestic markets of raw goods The heroin epidemics/cocaine channels

Organized Crime as a Network

The Changing Nature of Organized Crime in Bulgaria Organizatio Violence Corruption n Market The Ban 1997 -1998 Abandoning the protection racket Police, prosecution Fragmented, creating international links Searching new sources of income Legalizatio n 1999 -2000 Targeted Entire spectrum + Political elites Three levels of networks, internationaliza tion Privatizatio n deals, “special markets” Redistribut ion 20002002 Executions at the highest level Entire spectrum + courts Three levels of networks + hierarchies, regions EU- Executions Entire Three levels of Monopolizi ng markets, domestic and internationa l

Bulgarian participation in international criminal networks Bulgarians detained in Holland Index of arrested foreigners in Holland 1996 -2002 / 1996. = 100 Former Soviet Union Hungary 349 87 Poland 202 Former Czechoslovakia 193 Albania 285 Romania 192 Former Yugoslavia Bulgaria 88 1160

The Changing Nature of Organized Crime in Bulgaria Smuggling (cigarettes, alcohol, gasoline / gas) Parallel imports, Duty-free shops Lasting goods (home appliances, white goods) Grey import – underdeclaring values and quantities of imported goods Importing Chinese goods at underdeclared values Smuggling of Turkish goods

Organized Crime as Network and Corruption

Organized Crime Hierarchies and Corruption in Bulgaria’s Drug-Distribution Market Drug distribution areas coincide with police precincts. Each is headed by its own Hierarchical structure under the area’s boss

Structure of Organized Crime White Grey Black

Contract Killings Russia Bulgaria Murders per year Contract killings per year 33 000 500 -600 240 -250 30 -35

Studies of Irregular Payments Ø Irregular Payments = (market size in terms of number of containers) x (irregular payment per truck)

Nationality of firearms traffickers Nationality 1998 1999 2000 2001 2002 2003 Bulgarian 2 - 5 2 4 5 Turkey 4 - 3 1 4 3 Macedonia - 2 7 2 3 - - 1 4 1 - 1 Albania 1 - 3 - - - Others (12 other nationalities) 9 - 2 5 5 8 Serbia