Cross-Border Smuggling Epidemic Exposes Canada, U.S. to Security Threats, New MLI Study Warns

Editor’s Note:  The MLI study, BORDER INTEGRITY, ILLICIT TOBACCO, AND CANADA’S SECURITY by Jean Daudelin with Stephanie Soiffer and Jeff Willows, is attached here.

From: Press Release

Perpetuating the status quo is both irresponsible and dangerous; it would effectively surrender control of a wide swath of the Canada-U.S. border to organized crime factions that control the contraband trade in tobacco.

OTTAWA, ONTARIO, Mar 27, 2013 (MARKETWIRE via COMTEX) — Far from a victimless crime or a local police problem, cross-border smuggling is an epidemic that renders both Canada and the United States vulnerable to external security threats, a study released and commissioned by the Macdonald-Laurier Institute (MLI) warned today.

Smugglers threaten the safety and integrity of local populations, as well as the viability of future Canada-U.S. economic and security co-operation along the border, the study’s authors warn.

The Ottawa-Montreal corridor bordering the states of New York and Vermont is one of the worst regions for cross-border contraband and human smuggling on the Canada-U.S. border. Although the contraband trade is active in many border regions, including in the Pacific Northwest and along the East Coast, it is endemic in the Cornwall, Ontario, region between Montreal and Kingston and upstate New York.

The unique geographic and legal characteristics of this corridor create the conditions in which the illegal movement of narcotics, weapons, humans, tobacco and counterfeit goods can thrive.

The study’s authors found that policing on both sides of the border appears to have reduced the flow of non-tobacco contraband for the moment, but it is by no means eliminated. As for the tobacco trade, it continues unabated.

Turning a blind eye is no longer an option, they said. Perpetuating the status quo would be both irresponsible and dangerous. At worst it could effectively abdicate control of a wide swath of the Canada-U.S. border to the organized crime factions that control the contraband trade.

Because the smuggling is controlled by organized crime, there is no guarantee that it will not expand again in the future, or that it will not expand into more damaging activities. This leaves both Canadian and American citizens vulnerable to security threats and diminishes the integrity of our shared border.

“Since much of the illicit trade takes place around and across the border between Canada and the United States, it potentially threatens Canada’s relations with the U.S. by raising U.S. insecurities about its northern border,” said Carleton University professor Jean Daudelin, whose team included post-graduate students Stephanie Soiffer and Jeff Willows.

“U.S. measures taken to stem contraband could impair the free flow of merchandise and people between the two countries, creating a direct cost to Canada’s economy.”

Prof. Daudelin said the smuggling pipeline in the Cornwall region while chiefly devoted to tobacco, is already used to transport other forms of contraband and these activities could all too easily be expanded.

“The smuggling infrastructure established to sustain the tobacco trade is used for other ‘goods’ and the amount of money involved has developed into a major law enforcement and security conundrum,” he said.

“The profits generated by the various smuggling activities constitute a large amount of money whose use escapes all control. They can be used to seed other criminal activities or finance terrorist organizations.”

The extent of smuggling activity at the border is not really known. Government estimates suggest that $2.5 billion is lost every year in Canada in tax revenue from contraband cigarettes. Most of this revenue (between $1 billion and $1.5 billion) is lost in Ontario and Quebec. In 2009, more than 2 million units of ecstasy and nearly 80,000 pounds of marijuana and were seized in this region. Illicit weapons are regularly seized at the Cornwall border.

Despite the magnitude of the problem in economic terms, it is still framed in Canada as a local crime issue. However, implicated in this trade are groups involved in international organized crime and terrorist activities. Criminal organizations are exploiting traditional First Nations legal and territorial rights in this region.

In the Cornwall area, the boundaries of seven jurisdictions (two countries, two Aboriginal groups, two provinces and one state) come together. This makes it an ideal route for high-value illicit trade that is extremely difficult to monitor and control.

For most of the region, the Seaway is the dividing line between Canada and the United States and the Aboriginal lands of Mohawk Council of the Akwesasne (Canada) and the St. Regis Mohawk Tribe (United States).

The study said federal authorities on both sides of the border appear to tolerate the illicit tobacco trade in favour of containing the broader criminal and security dangers that smuggling and its repression represent. On that count, current efforts have been successful.

“Tensions with the Mohawk community have been rare, confrontations largely avoided, and a fluid and effective relationship with the Mohawk police on everything but tobacco on reserve has been built,” Prof. Daudelin said.

The study said a solution is possible, but will require a co-ordinated, comprehensive approach at the federal, state, provincial, municipal and First Nations level. Any roadmap for change must take into account the framework for tobacco control and taxation, the relationship between Aboriginal and non-Aboriginal communities and the security and commercial relationship between Canada and the United States. The goal would be to reduce the incentives for illegal trade, increase the effectiveness of seizure and prosecution efforts, and help generate viable and legitimate economic options for the Mohawk community.

The study was based on data from U.S. and Canadian government sources, academic research and media reports. Data also came from a comprehensive analysis of seizures by the Canadian Border Services Agency in the 401 corridor over the past five years, and a review of Canadian judicial cases referencing illicit tobacco, trans-border crime, drugs, weapons or human smuggling.

The authors also conducted several interviews with consumers and buyers of illicit products and with current and former Canadian law enforcement officers, whose identities remain confidential.

Jean Daudelin is associate professor at Carleton University’s Norman Paterson School of International Affairs (NPSIA).

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.


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