Illicit Networks: An Overview

By Pardis Mahdavi, Google Ideas Fellow, Pomona College, with thanks to Jay Chittooran, Council on Foreign Relations


Mexican marines escort Zurita Herrera, a financial operator for the Zetas drug gang in Veracruz (Handout/Reuters).
Illicit networks, by definition, are covert, illegal, and can sometimes use force, fraud or coercion. They cover a lot of ground; illicit networks include trafficking (drug, arms, and human), organized crime, terrorism, organ harvesting, and many other areas throughout the informal economy. These networks appeal to wide swaths of people because they are less cumbersome, generate better work opportunities and create more profitable ways to make money. In efforts to combat them, many countries, unilaterally and multilaterally, have enacted laws proscribing their activities, ironically creating new areas for these networks to exploit. This short memo will provide a brief background on elements of this cat and mouse game, a discussion of legal considerations, and an exploration of the role of technology in these illicit networks.

Background: definitions of salient terms, draw of illicit networks, and supply chains

What are illicit networks and what is their appeal? The terms illicit and licit are incredibly broad and are often interconnected or operate on a continuum. Illicit networks can refer to areas ranging from arms trafficking to organ harvesting to informal or counterfeit exchange of goods or currency. The limits of each term are not clear, and there are no universally established or accepted definitions. Rather, each state defines its own laws, which are themselves socially constructed—and malleable, creating a lot of grey areas in what many suppose to be black and white.

Money hidden in pastries seized by German customs agency Zoll is displayed before the agency's annual results news conference in Berlin (Thomas Peter/Reuters).

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The sheer draw of illicit networks for individuals, groups, and some states cannot be ignored. By virtue of operating without reference to law—especially tax law—these networks are perceived by those who use them to be more efficient and much more lucrative. They can create work opportunities where there are none in the formal economy, especially where poverty and debt bondage drive individuals to desperate measures. Technology has also contributed to the draw by making it easier for illicit actors to remain anonymous, increasing the security of certain illicit networks.

Narcotics wrapped in 10,000 brown and silver packages are on display in the patio of the Morelos military base in Tijuana (Jorge Duenes/Reuters).

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Supply chain evaluation is proving a major weakness in the armor of illicit networks around the world. Until recently, many companies across the globe have been or are implicitly involved with illicit networks through their “licit” supply chains. Previously, if a good was produced illegally—in an illegal fashion, location, or with forced or coerced labor—there was a level of tacit approval that came from these organizations. However,advocates, reporters, and technology are increasingly empowering consumers with knowledge, and companies,conscious of their brands,are being held accountable. Legislatures are also creating tools that help drive the process. The California Transparency in Supply Chains Act of 2010, for instance, requires information about imported goods to be widely accessible and companies are obligated to clearly lay out their plans to combat trafficking within their supply chains. However, problems still remain. Faulty supply chains have helped created the illicit timber industry. The industry, which generates earnings of $10-$15 billion per year.Lumber producers forge certifications and commit label fraud to make illegal timber seem perfectly legitimate, and falsely label timber as more expensive types of trees.

Illegal loggers sit on their boat after loading wood they cut from mangrove forests,before they are detained;in Port Klang (Bazuki Muhammad/Reuters).

Legal Questions: The relationship between the licit and illicit, and mafia states

By definition, transnational crime crosses borders, but efforts to combat it remain corralled within national borders. Existing international legal frameworks focus too little on combating corruption and do not effectively address the market that underpins transnational crime globally. The current regime suffers from critical normative gaps, and sensible strategies where norms exist. The UN Convention Against Transnational Crime is the central international framework governing crime, but it has not been implemented faithfully. The UN Office on Drugs and Crime and Interpol, the primary global institutions responsible for coordinating multilateral anticrime efforts, remain grossly underfunded. Bilateral programs like Plan Colombia and the Mérida Initiative channel significant funds toward the effort, but the aid is overwhelmingly military, and funding for more comprehensive solutions has consistently decreased year after year.

Further, the interplay of law and its lack blurs the boundary between the licit and illicit. States often engender illicit activities through the creation of new laws and regulations. Some states take advantage of laws designed to protect them, such as diplomatic immunity, to engage in illicit activities. To make actual improvements on the ground, states, the NGO community, and their citizens need to create virtual dynamics in which better legal frameworks combine with law enforcement and an empowered civil society to increase community resilience.

A Justice statue is pictured at the office of Masoud Shafie, lawyer for the three U.S. hikers charged with spying after they were arrested near Iran's border with Iraq, in Tehran (Morteza Nikoubazl/Reuters).

States themselves can also be engaged in criminal enterprises, though their laws may not criminalize them, in order to remain in line with state interests. States also often work with corporations to create laws that might encourage rights-violating industries. This engenders a hybrid state, or corporation as the case may be, that is nimble, protected, and particularly hard to combat. It is one thing when countries produce laws with unintentional negative consequences, but what about states that make intentionally illicit laws for profit?

Former North Korean leader Kim Jong-il with senior military officers (KNS Korean News Agency/Reuters).

Technology components

Technology has always been a boon to illicit networks, as many actors are early adopters of mechanisms that enable them to stay one step ahead of the state. Today, everything from cellular technology to drones to genetic engineering is fueling illicit networks. Technology cuts both ways and has been used to good effect by governments and non-governmental actors to map and disrupt various networks.

A foreign domestic worker walks into a shelter run by Caritas in Dora (Cynthia Karam/Reuters).


While illicit networks across the globe are thriving, a review of the circumstances and situations show cause for hope. Technology, which can be used to keep shadow networks hidden, has also been used to understand, map and empower those suffering within these networks. However, a few issues need to be addressed going forward. By examining illicit networks holistically, including their origins, sources of support, interactions with other illicit and licit economies, and the lived experiences of impacted individuals, we can begin to understand and visualize the critical nodes and mechanisms of illicit systems. With this understanding, we can come up with creative options that can mitigate the violence and the costs associated with some of the world’s most dangerous illicit networks.

Thought Questions
  • 1. Does poverty affect involvement in illicit networks?How would following money patterns and understanding political economy give insight into the draw and functioning of illicit networks?
  • 2. Do you agree that technology has made some illicit networks safer? How has technology operated to make other types of illicit networks safer?
  • 3. Structural violence (such as poverty, debt bondage, and threats in the form of extortion or gender or racial discrimination) is often cited as a motivating factor for involvement in different types of illicit networks. How, specifically, does structural violence operate in both similar and different ways across different types of illicit networks and in different regions or parts of the world?
  • 4. How do illicit networks operate at the individual, kin, network, state, and interstate level? Can they sometimes operate at multiple levels simultaneously? How do these networks grow?
  • 5. Why are illicit networks so popular? What are the benefits of having these networks? For the state? For the illicit network participants?
  • 6. Is there a legal framework that can protect participants in illicit networks? Have new laws and regulations encouraged the eradication of illicit networks?