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Organised Crime in Chile

Organised Crime is a category of crime that involves highly centralised groups as they seek to commit large scale crimes on a large scale that are heavily planned and controlled. In the context of Chile, the main facets of organsied crime are: drug trafficking, money laundering and human trafficking.

Chile national flag

History of Organised Crime in Chile

Augusto Pinochet

Augusto Pinochet (who was a dictator in Chile from the 1970s) fell from power in 1990. Following this Chile has had a relatively stable economic and political environment compared to many other South American nations it borders. Whilst homicide rates are only one aspect of a nation's crime rates, as an indicator, Chile has the lowest homicide rate per 100,000 at 3.46% as opposed to some other South American nations like Venezuela and Brazil which come in at 56.33% and 29.53% respectively. Over the past decade it has become evident that Chile's involvement in organised crime (and crime generally for that matter) is mostly transnational, with Chile's involvement being more so as a transshipment destination for the big drug cartel nations such as Bolivia and Peru.

Money Laundering and Drug Trafficking

Money Laundering and Drug Trafficking are two of the main dimensions of organised crime in Chile. Money Laundering involves taking large amounts of profits that are generated from illegal activity and shifting or hiding them in financial institutions so as to 'launder' the money into make it look legitimate. Drug Trafficking is "a global illicit trade involving the cultivation, manufacture, distribution and sale of substances which are subject to drug prohibition laws." In regards to money laundering "the criminal phenomenon of money laundering has not prospered as strongly as it has in other corrupt and weak states in the region... the politics of re-democratisation has unveiled the lack of security frameworks for countering illicit money flows associated with these novel socio-economic trends." Following the development of a financial intelligence unit (FIU) in 2003, it is clear that any prior instances of money laundering were simply due to the lack of adequate regulations as Law No. 19,913 has articulated the restrictions on what is considered to be money laundering and subsequent investigations have taken place to combat those industries and companies that are not complying. Most recent data in 2016 saw the UAC anti-money laundering watch dog issue 209 sanctions for companies and individuals operating within the private sector. Of those fined, 83 were users of free-trade zones, 23 were customs agents , 19 were forex brokers, three were banks and one was a casino.

Due to Chile's large coastline and numerous borders it is an appealing spot for drug trafficking. Whilst manuafacturing and domestic consumption for narcotics is relatively low in Chile in comparison to the rest of South America - its role in the distribution process is large and growing. The visibility of LSD, ecstasy, coca paste, cocaine and marijuana in Chile are on the rise since 2009 with a United Nations Office on Drugs and Crime (UNODC) 2016 report estimating that "9 percent of the cocaine trafficking incidents registered on African soil were linked back to Chile" The UNODC report argues that it is Chile's geographic location that is resulting in it being such a large transshipment destination. The most recent major drug cartel bust in Chile was the arrest of El Rico n October 2017 who was individually responsible for an estimated 60% of Ireland's cocaine supply. One of the largest issues facing authorities in regards to drug trafficking is, once the drugs have been seized, tracking their origin. An example of this was in February 2019 when 1.6 tonnes of cocaine was loaded onto a ship in Chile before being seized at Port Newark, New Jersey. Whilst the drugs have been seized, no arrests have been made as of yet.

Regulations in place to prevent organised crime

The United Nations Office on Drugs and Crime (UNODC)

UNODC logo

UNODC was formed in 1997 and acts as the UN's global watchdog for crime and drugs. UNODC is ratified to help member nations in their struggle against terrorism, crime and illegal drugs. Member States also aim to fight international crime in all capacities and to take a stand against international terrorism. In Chile specifically, UNODC aims to focus on a bottom up approach in combatting risk factors that lead to crime and violence.

Carabineros de Chile Roundel

Carabineros de Chile

The main branch of the Chile police force that has jurisdiction over the entirety of the nation. During Pinochet's rule the Carabineros de Chile were not a trusted police force and were renowned for putting the interests of the government and authorities above the interests of the civilian population. The force has undergone a complete renewal since this time and recent statistics show an overwhelming trust and respect for the force.

Unidad de Análisis Financiero (UAF)

Chile's Financial Intelligence Unit was established in 2003, as part of the global Egmont Group, following the implementation of Law 19, 913 ("Law No. 19,913, published in the Official Gazette on December 18, 2003, created the Financial Analysis Unit (UAF) and modified various provisions regarding money laundering and asset laundering."). The aim of the UAF is to protect the financial system and prevent crimes such as money laundering and the financing of terrorism being involved in Chilean economic activity. The role of the financial intelligence unit is primarily to protect and source information relating to fraudulent activity in Chile and build cases accordingly. Legislatively the UAF's job is described in two ways:

1. "To hide or cover the illicit source of specific assets, knowing that they derive from, directly or indirectly, the commission of any of the following crimes, or hide or cover such assets knowing that they have such illicit source"
2. "To acquire, possess, hold or use such assets, with the intention to obtain a profit, knowing their illicit source at the time such assets are obtained."

Council of Defence of the State (CDE)

"The CDE is the public agency that defends, represents, and provides legal advice to the Chilean state as regards its proprietary and non-proprietary interests" The overarching goal of the CDE is to ensure that Chile is protected and has the highest standard of legal guidance to ensure the protection of state resources. LQ 19,366. The Minister of National Defense is the President's closest associate when it comes to discussing governance and administration of defence. They work closely together to ensure that threats to Chile's national security are taken care of and preempted.

Brigade of Organised Crime (BRICO)

A branch of the Investigations Police of Chile (PDI), BRICO is an organisation that is purely set up to monitor intelligence surrounding organised crime in Chile. They work closely with the narcotics team and work transnationally to combat organised crime throughout the South American region. "The BRICO investigated crimes that were a “threat to the nation’s security”, in particular when there was evidence of organised criminality". The group was set up in the 1990s as it was decided that governance focussed too heavily on street crime and did not provide enough man power when it came to organised crime.

Legislative Developments

• Law 19,366 - passed in 1995 this law was essential in allowing the CDE to obtain financial records and account statements of groups alleged to be involved in narcotic trading. This "imposed criminal and administrative sanctions on those who (i) participate in the use, profit and destination of all assets deriving from the commission of any drug-related crimes; (ii) refuse to provide required information as described above; and (iii) fail to report any drug-related crime to which they became aware by reason of their position or job."
• Law 20,000 - passed in 2005 and currently in place replaced 19,366 and articulates that "Public Prosecutors may request from the courts, without prior notice to the affected person and even before formalising the investigation of any drug-related crimes, the adoption of any precautionary measure necessary to prevent the use, exploitation, benefit or destination of any asset, securities or monies derived from such drug-related crimes"
• 2008 addition to Law 20,000 (Ley de drogas) involved the tightening of the law to make cannabis trafficking offences as strong as cocaine or heroin. This came from increased concern about growing consumption of cannabis in inappropriate quantities.
  

Groups involved in organised crime

Patricio Gálmez

Arrested in 2003 after Chilean authorities seized two shipments of cocaine from the Kristel Food Bananeras group which was discovered to be a façade company based in Chile for laundering more than $500 million worth of property.

Augusto Pinochet

Former dictator turned commander-in-chief of Chile army involved in an embezzlement case of up to $77 million by Banco de Chile. The discovery of the large scale money laundering operation in 2005 at Rigg's bank uncovered a link to Pinochet who had opened a Rigg's account and used it as a shell corporation for laundering millions of dollars as early as 1985. The account was overseen by Rigg's employee Carol Thompson who left the company in 2003 prior to the law suit accusing Pinochet of embezzlement and fraud. Pinochet died in 2006 before the investigation was over however the claims were passed onto his widow and children but the case was dismissed when $9 million was pledged to help victims of the Pinochet regime.

People Smuggling Groups

Immigration into Chile has increased by more than 400% following the fall of Pinochet in 1990 and most of this is legitimate however it has also seen a large increase in human trafficking. "“A person who enters a country, who has been smuggled, stays in the country in a very vulnerable situation. They don’t have paperwork, they are looking for a better life but cannot work legally. That situation can be preyed on by criminal groups such as human traffickers." Chile was involved in the 2018 Operation Andes which convicted 49 people of people smuggling from Haiti and Africa into parts of Latin America (Chile was one of these nations) Between May and July 2018, 155 500 undocumented immigrants entered Chile giving rise to the chaotic nature of their immigration policy which is providing room for human trafficking.

Lanzas Chilenos

A Chile street gang that started as simple pickpockets and has transformed into a large global operation in which Scotland Yard described them as "the best thieves in the world". The group is highly organised and members of the gang enter European countries including the UK, Spain and Italy. Members of the group enter European nations as Chile tourists allowing them to stay for up to 6 months without a visa and engage in preplanned theft of high end houses. More than 1 million British Pounds was reportedly stolen from wealthy households in South-West London and Surrey The group was dismantled in 2018 in a large scale police operation between the Metropolitan Police Service (Scotland Yard) and the Chilean embassy in "an investigation known as Operation Genie"

Fatherland and Liberty Logo

Fatherland and Liberty (Patria y Libertad)

A paramilitary group that was created in 1970 by Pablo Rodriguez Grez and lasted until 1973. The group was criticised as being ultra right-wing and being a front for the CIA in Chile due to the nationalist opinions of it. The group became increasingly violent as they involved themselves in street brawls and rumoured to have plotted several attacks against retired army officers who were considered by the group to be too liberal in their immigration viewpoints.