Border security Transnational Crime in Micronesia (Part 1)

Micronesia is an enormous, remote, thinly populated region containing two independent microstates (Kiribati and Nauru), three states in ‘Free Association’ with the USA (Republic of the Marshall Islands or RMI, Federated States of Micronesia or FSM, and Palau), and two US territories (Guam and the Commonwealth of the Northern Mariana Islands or CNMI). Micronesia straddles the equator and is laid out in a light dusting of atolls, islands and reefs scattered across a truly enormous expanse of open ocean from the Philippines to Hawaii. The total population is about 500,000 people on about 2,000 square kilometers of land dispersed across millions of square kilometres of sea. Of this population, about 400,000 are US citizens or residents, or have unfettered access to the USA due to Compacts of Free Association with that country.

21st Jul 2011

 Border security

 Transnational Crime in Micronesia (Part 1)

Byline: Michael Yui / Singapore

Micronesia and its Law Enforcement Problems

Micronesia is an enormous, remote, thinly populated region containing two independent microstates (Kiribati and Nauru), three states in ‘Free Association’ with the USA (Republic of the Marshall Islands or RMI, Federated States of Micronesia or FSM, and Palau), and two US territories (Guam and the Commonwealth of the Northern Mariana Islands or CNMI). Micronesia straddles the equator and is laid out in a light dusting of atolls, islands and reefs scattered across a truly enormous expanse of open ocean from the Philippines to Hawaii. The total population is about 500,000 people on about 2,000 square kilometers of land dispersed across millions of square kilometres of sea. Of this population, about 400,000 are US citizens or residents, or have unfettered access to the USA due to Compacts of Free Association with that country.

None of the Micronesian states are economically viable. All of its states are aid-dependant, and aid is at least a primary income source. Government corruption is endemic, if mostly minor and relatively low key. Other revenues flow from tourism, commercial fishing and a declining garment industry. The region is wide open to transnational criminal activity and transnational criminal groups from the Philippines, South America, Taiwan, China and Japan have been identified operating in Micronesia. These value Micronesia for its excellent air connections to the USA, easily suborned law enforcement personnel, jurisdictional fracture planes and remoteness.

An enormous maritime drug route runs through Micronesia. Singaporean authorities have not studied this route heavily, but other law enforcement agencies have. One Chinese study hints that 40-100 tons of cocaine are transported over this route annually, but the bald truth is that nobody knows.

The Micronesian states are extremely fragile.  These are poor societies with little ability to withstand high internal levels of violence, crime or mental damage. The greatest threat to the states of Micronesia is drugs, and the drug of most concern is methamphetamines. Methamphetamines abuse causes high levels of mental damage to addicts, who become violent and dependent on robbery, burglary or prostitution to finance their habits. Methamphetamines are the ‘perfect storm’ for these fragile societies, and could pose an existential threat to them. Asian Transnational criminal operations are reasonably common in the western parts of Micronesia, those closest to and with the best communications links to Asia. High quality crystal methamphetamine is smuggled in from Hong Kong, the Philippines and Taiwan and sells for US$450 to US$1100 per gram, compared to a tenth of those prices in the USA. Low-quality methamphetamine (Philippines shabu), has also been found in the region and sells for an order of magnitude less than crystal methamphetamines; roughly on par with US domestic prices for crystal methamphetamine.

The northern of the two trans-Pacific cocaine routes transits Micronesia. Cocaine is shipped west to Asia (mainly to the booming Chinese and Japanese markets where it competes with the extremely high quality crystal methamphetamines manufactured and exported by the North Korean Government), while indentured illegal workers (modern-day slaves), counterfeit cigarettes and methamphetamine precursor chemicals are shipped east in counter-trade. A unique feature of Micronesia is the spotty cocaine trade inside the region caused by occasional washups of cocaine shipments lost overboard by the cocaine motherships. These will be covered more thoroughly in later parts of this regional survey.

There is a local trade in Micronesian-grown marijuana, which is the drug of choice in the islands as it can be grown locally for personal use. It is also grown for regional export in Palau and the FSM. Again, this will be covered in more detail in later parts of this paper.

Other illegal activities include the usual rapid penetration of the regional economy by Chinese transnational crime organisations. These use the same tactics as in Melanesia; cheap, smuggled counterfeit goods with illegal workers indentured to the criminal organisations to run retail shops and stores. These provide a base for other criminal activities and for the laundering of illegal profits. These ‘businesses’ pose a lethal economic threat to all the small island states, and even to the largest of Melanesian states. Like the Melanesian and Polynesian states, the Micronesian states are dependent on customs revenue for most of their non-aid based income. The Chinese transnational criminal organisations attack this income stream directly by smuggling in counterfeit goods of all kinds and also by bribing customs officials so they ignore under-valuation of imports from China. They then repatriate all profits, draining the very scanty wealth of these countries. Nothing is re-invested, and very few locals even employed. After all, what is the point of paying wages to locals when you can get a Chinese illegal immigrant to pay you to smuggle him or her to Micronesia, there to ‘pay off the rest of their debt’ by working for bare keep running your retail system? Statements by Micronesian law enforcement officials make it plain that they regard Asian commercial activities, especially fishing and retail business, as the primary threat to Customs and Immigration laws, due to their deliberate tactics of corrupting law enforcement officials.

These groups and their activities directly attack the revenue base of Micronesian states. All of these states lack the resources to effectively combat this, and are therefore very vulnerable to this form of criminal activity. As several frustrated Micronesian officials noted, it is just too easy to entice very poorly paid law enforcement officials with smuggled cigarettes and alcohol, leading on from petty to serious corrupt practices which become embedded in the local law enforcement culture. This is precisely what has happened in Papua New Guinea, for example.

Guam, CNMI and Palau have large numbers of Asian tourists arriving each year. Drug and cash mules are among these tourists. These countries also have a declining garment industry, which used to employ thousands of Chinese workers. These mostly remain and are now exploited for vice crimes (gambling, prostitution, retail drug sales and use) and also provide a way to conceal people trafficking to and through the islands. The countries with easy access into the USA are prime targets for people traffickers and smugglers, as they provide a route into one of their most lucrative target states.

Law Enforcement Coordination and Cooperation

The region is also a place of uncoordinated law enforcement and multiple jurisdictions.  Information is not centralised across the region. For example there is no centralised criminal database and information on transnational criminal organisations is not shared.

This lack of a cooperative law enforcement community has been widely recognised. US efforts to develop region-wide law enforcement cooperation have failed. This is due to the differences in scale, the ‘stove-piped’ nature of US law enforcement and their own culture of not sharing information. They also tend to ‘move in, shove us aside, take over, then leave’ as one Micronesian law enforcement official noted. So they have not met with much success.

In recent years, the Australians (working in cooperation with US and New Zealand law enforcement agencies) have begun to extend their Pacific Transnational Crime Network (PTCN) into Micronesia. This system is very different. It is small, quiet and effective, and it is very much ‘owned’ by the island states themselves. The Australians fund it, but through the Pacific Islands Forum, and there are very few Australians in it, and those in mentoring and project management positions. The Pacific Transnational Crime Network is manned by the island states themselves: indeed only the very best Island States law enforcement personnel are selected to serve in it, and they are the ones who conduct its law enforcement activities. This is what is needed, as Micronesian nations lack a central point to pool and evaluate their criminal data and intelligence. The PTCN has proven successes under its belt in Melanesia and Polynesia in this field, and over time has slowly developed an improving transnational law enforcement picture. Transnational crime can only be efficiently fought with transnational law enforcement and this includes pooled criminal databases and multi-national, multi-agency law enforcement intelligence analysis. Traditionally, Micronesia has been highly fragmented, with jurisdictions not sharing data and not cooperating in law enforcement activities even within single countries. The PTCN will slowly and gradually change this from the inside, under the control of the Island States law enforcement personnel themselves.

Even the basic functions of Micronesian states can be incomplete or flawed.  In 2007, research and evaluation of Micronesian states showed that none of them had identified how much revenue is generated by foreign owned businesses, let alone how much of this they remitted out of the various Micronesian states. This meant that they had little idea of how much their Customs and Excise systems were being affected by avoided customs and excise and smuggled goods.

The Major Threat to Micronesia

The major transnational criminal problems facing Micronesian law enforcement include detecting and identifying crystal methamphetamines and precursor agents. Few Micronesian law enforcement agencies are familiar with these substances and their ability to identify them has been poor. Since 2008, US and Australian efforts have seen some improvement in this area. Their ability to deal safely with clandestine methamphetamine laboratories is also in need of development. These are dangerous sites full of toxic chemicals, they are highly inflammable, explosive, or both. Law enforcement in Micronesia is also affected by poor resources, corruption, and an inability to track the financial affairs of criminal entities.

The Countries of Micronesia


Introduction. Guam is a 333 square kilometre incorporated territory of the USA. It is the southernmost of the Marianas chain and hosts extensive US base facilities. Because of these it has excellent transport linkages to the USA and Asia. About 20% of the 175,000 population are non-US citizens. Only 37% are Chamorro and about 33% Filipino and north Asian. Guam has a major tourist industry, attracting mostly tourists from Japan, South Korea, Taiwan and Hong Kong.

The major threat to Guam is crystal methamphetamines. This drug is imported from Asia by mules, posted in from the USA in parcels, and produced locally in clandestine laboratories. Most users are locals although Asian-run businesses and tourists contribute significantly to the trade. Local Asian-run vice businesses provide the bulk of prostitution and gambling services on the island. The methamphetamines trade cannot be ‘stamped out’ as recently suggested by one official, as the island imports most of its food, consumer and industrial goods from the USA and Asia. Both the port and Guam international airport have connections to North America, North Asia, South east Asia and Australia.

The ‘normal’ drug case investigated by Guam Police Department (GPD) is a marijuana case, but they stress that these rarely involve any form of violence. About a third of their drug cases from 1001 to 2010 involved methamphetamines, and these involved higher levels of violence. Additionally, the users had a far higher ratio of supporting their habit through other forms of criminal activity. These ranged from selling drugs themselves, to prostitution and crimes of violence.

As with all drug seizures, amounts are patchy and it is difficult to detect trends. There have been no massive seizures in the tens or hundreds of kilo range, instead the trade is characterised by a steady flow of bodypack and postal seizures, with annual seizure rates tending to be below ten kilograms. Most of the crystal methamphetamines seized originate in Asia, but most of the drug imported has traditionally come from the USA in parcel post. From 2006 the US Postal Service began to upgrade its detection systems in Guam in order to attack this trade, but these officials did not prove willing to provide information on their seizure rates. It is believed that most of the scanning is done in San Francisco, Hawaii and San Diego mail sorting facilities, through which all US mail to the island passes. These facilities also deal with US mail heading for Palau, FSM and the RMI, so similar impacts on parcel post drug seizures can be expected there.

Heroin and cocaine are not drugs of choice in Guam and very little has been seized. That which has been seized has been very small quantities brought in by tourists for personal use.

Locally Originated Drugs. Guam, like all Micronesian states, has an ideal climate for marijuana cultivation. It is grown in the rural north and south of the island and is also imported from the CNMI, Palau and FSM. Depending on availability of military aircraft and good weather, the GPD has an annual marijuana aerial survey and eradication program, which is conducted in conjunction with the US National Guard, a standing military reserve force maintained at State level. In favourable years, this normally leads to the location and eradication of 2000-3000 plants on Guam and Saipan.

Terrorist Activities. Guam has been unique in Micronesia in having a connection to terrorist activities. There is a low terrorist threat to Guam per se, but in September 2006 members of the Liberation Tigers of Tamil Eelam (LTTE) were apprehended by US officials in Guam, as part of an operation being run from the US state of Maryland. They were there to purchase night vision equipment, specialised sniper rifles, automatic weapons and grenade launchers. They had been seeking a wider variety of weapons. The persons arrested later received long prison sentences, and fines, including fines for money laundering. It is believed that their money laundering activities were done in conjunction with organized criminal entities.

People Trafficking. People trafficking is a major law enforcement issue in Guam. There is a a constant small scale traffic from Saipan via Rota in small craft (Saipan is 73nm from Rota, which is 47nm from Guam). The standard operation is a Filipino or Chinese smuggler bringing 4-20 Chinese from CNMI to Guam for US$3,000 to US$6,000 per head. Guam has many landing sites, but the best one is at Tumon, where people landed can instantly blend in with local Asian tourist pedestrian traffic.

Customs and Excise Avoidance. Guam enforces its own Customs, Excise and Quarantine laws and coordinates with the US Customs, Immigration and Border Enforcement authorities. There is a jurisdictional coordination issue here, as no export license is required for exports to the USA, but these are required for exports to or imports from other destinations. This permits possible staging via Guam or the CNMI of goods to be moved to Asia, with reduced risk of detection prior to export. This is the ‘low risk port of origin’ gambit. Guam is not recognised as a high risk destination for exports from the USA. Neither is it recognised as a high risk origin for goods imported into Asian jurisdictions.

Money Laundering. There have not been significant cases of money laundering noted in relation to Guam, with the exception of activities connected to methamphetamines trafficking. What has been noted is initial distribution of North Korea Government manufactured forged US $100 denomination ‘supernotes’. This is believed to be due to proximity to Asia and the tourism flow between to Guam. Guam, however, is a high-risk location for money laundering. It is close and well connected to Asia, close to terrorist organisations in the Philippines, has major banks present, and lacks sufficient law enforcement coverage to detect significant outbound cash packages. Numbers of suspicious activity reports into the US financial reporting system have been increasing since 2001.

Guam Law Enforcement Community. Guam has the largest but most diverse law enforcement community in Micronesia. This is due to the presence of so many major US agencies. Locally, there is a US Attorney for the Districts of Guam and the Northern Marianas Islands. The US Attorney serves as the chief US federal law enforcement officer for these jurisdictions. Additionally, the US maintains a presence with six law enforcement agencies plus the US Coast Guard. The Guam Police Department, Customs Service and Quarantine Service therefore have a difficult task, as they can be ‘shoved aside’ by many of these agencies, all of whom are better resourced on a per capita basis and able to call in massive external resources as well. Worse, some, such as the FBI (known locally as standing for ‘Famous, But Ineffective’) can sometimes bring in employees who ‘shove GPD out’ without compunction or even proper explanation. While not common, the damage to relationships such persons can cause at the local level can and does taint relationships long after they have gone. The US Attorney has conducted a monthly Law Enforcement Coordination Committee (LECC) for many years as a forum to encourage collaboration between agencies and between Guam and the CNMI.

Transnational Crime. Chinese, Japanese and Filipino transnational criminal organisations are present in Guam and dominate major sections of the people smuggling, vice crimes, local retail and drug markets. Due to the profusion of US law enforcement agencies, Guam is not a particularly easy target for them, and its main use appears to be as a logistics hub through which the USA can be accessed. The major threat to Guam per se from transnational crime is methamphetamines import and precursor chemical imports with the attendant production of the drug in clandestine laboratories.

Part II will continue with coverage of the rest of Micronesia.



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