XTC Production and Trafficking in Amsterdam

1
XTC Production and Trafficking in Amsterdam
Tom Blickman (TNI) Dirk Korf (UvA - UU) Dina
Siegel (VU) Damián Zaitch (EUR)
2
Framework

• Explorative, descriptive research on supply and
  distribution mechanisms and organisation of
  synthetic drugs in Amsterdam
• 1 year project (2002). EU financed. Co-operation
  Gruppo Abele (Turin) and TNI (Amsterdam)
• Comparison with Turin and Barcelona ? different
  stages of development

3
Methods and Sources

• For comparison ? common research protocol on main
  issues
• Range of qualitative methods and sources
• Interviews with active dealers and traffickers
  (through existing, previous contacts) ?
• 3 mid-distributors (10.000 to 50.000 pills, also
  for export)
• 2 retailers (up to 1.000 pills)
• XTC couriers detained in the US and Germany
  (previous research)
• Informants around the retail and consumption
  market ? DJs, doormen, bar personnel, staff clubs
  and discos, social workers and users (previous
  research)
• Interviews with police officers from the national
  Synthetic Drug Unit (USD) and Amsterdam (6)
• Secondary sources ? surveys and studies on
  consumption patterns, police annual reports,
  extensive press review (1996-2002), scientific
  and grey literature
• No use of police or judicial files

4
Historical Market Development

• Early and mid-eighties ? trend setting
  globetrotters from Goa and Ibiza ? 'home-users'.
  First 'aficionado-type' dealers and producers.
• Until 1988/1989 XTC still imported from Spain, US
  and Germany (Stanleys)
• End 1980s (1988) ? explosion ? house parties ?
  'out users'. Amsterdam distribution centre,
  mainly in hands of party organisers. First small
  labs.
• Increased police repression ? 'bonafide' XTC
  producers and original dealers left or retreated
  from open circuit ? more traditional criminals
  (hashish) and amphetamine producers from the
  south filled the gap
• Situation unchanged ? 'criminal
  professionalisation' with more police pressure
  and 'internationalisation' (Israelis, Colombians)
  with growing export

5
Consumer Trends

• Scenes first concentrated in SLOAPs (free
  areas) squats, abandoned cinemas and churches,
  old shipyards and factory buildings terrains ?
  but more and more 'recovered'
• Move to clubs, discos and commercial mega-dance
  festivals. Integration to 'dance industry'
• Still a 'party drug' ? survey in bars 2 versus
  25 amongst clubbers and ravers (current use)
• Users young, well integrated, 'white' Dutch or
  Europeans. No addiction or criminal activities
• Prevalence Above national average. Stable.
  Decreasing amongst 12-18 and secondary school
  students
• Health problems decreased 25 in the last 5 years
  (0.9 of those attending dance events)
• Some trends ? combination with 'new' alcohol,
  with cocaine (still preferred and increasing),
  and with Viagra

6
Retail Market

• 'Hidden market' ? mostly (78) purchased from
  relatives, friends and acquaintances. An 18 from
  home dealers or at the party, disco or club
• Export retail market of drug tourists from abroad
  ? gap in retail prices
• Very open, competitive, business-oriented
  networks in a free market (no territorial
  control, niches, etc.). Mainly native Dutch
• Local retailers are often users who buy/sell lots
  of 10-100 to friends to finance their own use and
  party expenses, and increase their prestige

7
Price and Purity

• Price ? significantly cheaper than elsewhere and
  over time (300 less in 10 years)
• Setting Quantities Relation Intermediates -
  Cost / availability PMK (production)
• 0.15/0.20 euro production costs, 0.90 production,
  1.50 wholesale 'first hand', 2.70 mid-level, 3 to
  7 euros retail (4/5 average in March 2002)
• Up to 15 euros in the UK and up to 40 euros in
  the US. Germany and Belgium approach NL
• Market saturation ? demand driven
• Purity ? Instead of expected pollution,
  increasingly cleaner 90 MDMA
• More than 775 different logos
• Exchange of quality information on the internet
• Pill testing ? more control and safety
• Self-tests available at smart-shops and on-line

8
Supply, Marketing and Distribution

• Even more hidden than retail
• Many mid-level dealers with criminal connections
  (also selling other drugs), supplying retailers
  up to 1000 pills
• No more 'hedonist' suppliers ? all for the money
• No stocks ? most buy on request
• All Made in Holland
• Wholesale transactions paid in cash after
  delivery ? but credit is common (especially with
  saturation)
• Tendency to restrict buyers (2 or 3) and to
  refrain to selling to strangers
• Marketing chains are short, but there is place
  for intermediates
• Dealers move and combine levels

9
Role of NL

• ALL sources ? 80-90 share in XTC production and
  export
• Difficult to find evidence. Several data problems
  (USD as 'the' expertise source, hidden market,
  etc.)
• Seizures are highly selective
• Situation in South East Asia and Eastern Europe
  largely ignored
• Signals of relocation ? Belgium, Germany, Hungary
  and Poland (less precursor control)
• However ? cheap production prices in NL are still
  an obstacle for displacement

10
Dutch comparative advantage

• Distribution centre for licit / illicit goods
  (air/seaports, transport)
• Trade and business tradition (incl. contraband)
• Extensive chemical industry
• Traditional amphetamine production (60s and 70s,
  southern provinces)
• Early techno and house scene ? Amsterdam centre
  for trendy youth

11
Production

• PMK form China and Eastern Europe
• Labs ? SLOAPs and residential (periphery) areas,
  often combined with indoor cannabis plantations
• Large labs in Limburg and Brabant ? millions
  pills. Near pig stalls
• Some temporary or 'mobile' labs, some only
  tabletting
• Around 35 labs dismantled every year ? 20-25 in
  greater Amsterdam
• Regular dumping of highly hazardous chemical
  waste by-products ? risky
• A lot of production 'on request'
• Large producers (criminal underground) control
  90 of local market
• Small producers pushed out due to intensified
  precursor controls

12
Trafficking Methodsand Routes

• Amsterdam is the 'logistic centre' ? national and
  international contacts, overall drug trade, etc.
• Centre for distribution, retail and export
• 80-90 of wholesale transactions are destined
  for export (more profits)
• Increasing 'cocktail' export transports
• Most exports seem to be overland (to Europe) and
  by air (to distant destinations)
• Human couriers diverted through various European
  airports. Use of decoys
• Two types of smugglers ? independent small-time
  and recruited-organised-professional
• Main destinations ? UK, Germany, US, Canada,
  France

13
Nature Trafficking Groups

• Three business models ?
• Joint ventures with employees and subcontracted
  personnel
• Partnerships with no employees
• One-man enterprises
• No mafia-like ? fluid and changing relations,
  very dynamic
• Few financers at 'top' production/export ?
  professional, well known illegal entrepreneurs
  (around 40 years-old)
• Brokers with no contact with the pills
• Rather consensual although violence from time to
  time

14
Ethnic Background

• Production and retail mainly native white Dutch ?
  also precursor import
• Wholesale and export ? inter-ethnic. Many foreign
  groups and individuals coming to buy to NL (small
  or large)
• Chinese networks ? involved in human smuggling,
  PMK/BMK import and XTC export
• Israeli traffickers based in NL ? role in
  establishing labs, export lines (US) and money
  laundering
• Other local ethnic minorities involved in other
  drug markets Colombians, Antilleans, Surinamese
  (export to the US and Latin America), East
  Europeans and Turks
• Dominican couriers to the US via Antilles and
  Spain

15
Social Background

• Heterogeneous ? male white Dutch underworld 'over
  40', wealthy foreign traffickers, local students,
  etc.
• No women
• Police profile of XTC club dealer young Dutch
  male (25-35), well educated, well-trained at
  sport schools, trendy beach bars, knows tourists
  and foreigners
• More hidden dealers ? closer to the users
  (friends and acquainted) or to traders in other
  substances (relatives)
• Close to production ? over-representation of
  'though guys' from marginalized but clannish
  white Dutch groups living in mobile home camps

16
Overlap with otherillegal markets

• Strong integration with other drug markets at all
  levels ? cannabis, hash, cocaine, amphetamine,
  heroin
• Hells Angels international distribution (also
  connections with arms trade and protection
  rackets)
• Also registered overlap with
• Fashion design knock-offs
• CD piracy
• Smuggling of cigarettes, alcohol and fireworks
• Money laundering
• Tax fraud schemes
• Firearms trade (many weapons usually found during
  raids)

17
Overlap with legal activities actors

• Precursors (controlled) and lab equipment
  (uncontrolled) ? most relation with chemical
  industry is parasitical
• Front companies ? paint or chemical waste removal
  companies, transport sector
• Professionals ? chemists, truck drivers, luggage
  handlers, airport cleaners, post service
  employees
• Disco owners, house party organisers, DJs ? small
  scale
• Doormen and security club personnel ? toleration
  favoured dealers, commission, re-selling of
  seized drugs
• Coffee-shop owners
• Investments in real estate in Amsterdam
• Corruption ? very limited. Some police involved
  in use and retail

18
Conclusions

• Market saturation
• Despite repression ? cheaper and better
• Professionalisation
• Traditional criminal organisations
• Concentration
• Integration ? with other drug markets
• Displacement ? to other countries
• Post-fordist ? on request, per project