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T R A N S N A T I O N A L

C r i m e &

G l o b a l i s a t i o n

DECEMBER 2004

T N I B r i e f i n g S e r i e sNo 2004/9

Cr ime and G loba l i sa t ion P rog ramme

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T h e E c s t a s yI n d u s t r yExploring the Global Market

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C O N T E N T S AUTHOR:Tom Blickman

EDITORS:Fiona DoveMartin Jelsma

DESIGN:Jan Abrahim Vos

PRINTING:Drukkerij Raddraaier,Amsterdam

FINANCIAL SUPPORT:Ministry of Foreign Affairs(The Netherlands)

CONTACT:Transnational InstitutePaulus Potterstraat 201071 DA AmsterdamNetherlandsTel: -31-20-6626608Fax: [email protected]/crime

Contents of this booklet maybe quoted or reproduced,provided that the source ofinformation is acknowledged.TNI would like to receive acopy of the document in whichthis booklet is used or quoted.

You may stay informed of TNIpublications and activities bysubscribing to TNI’s bi-weeklye-mail newsletter. Send yourrequest to [email protected] orregister at www.tni.org

Amsterdam, December 2004

● Editorial 3

● The Global Ecstasy Industry 4●● Ecstacy production and trafficking 5●● Box: Methamphetamine 5●● Box:The global ecstasy market 7

●● The ecstasy industry in the Netherlands 9●● The availability of ‘routine socio-eco-nomic

activities’ 10●● The characteristics of organised crime in the

Netherlands 12●● Historical advantages 13●● Specific law enforcement actions 16●● Multiplyer effect 17

●● Ecstasy Worldwide 18●● Production in the United States 20●● Box: US-Dutch cotroversies 21●● Eastern Europe 23●● China and South-East Asia 25

●● Conclusions 28

● References and useful websites 29

The responsibility for all views expressed in the text belongs tothe author and TNI alone.

TNI - DRUGS & CONFLICT SERIESEurope and Plan ColombiaDebate Paper No. 1,April 2001

In the Heat of the Debate. Fumigation and Conflict in Colombia.Debate Paper No. 2, September 2001

Merging Wars.Afghanistan, Drugs and Terrorism.Debate Paper No. 3, December 2001

A Failed Balance.Alternative Development and Eradication.Debate Paper No. 4, March 2002

Breaking the Impasse. Polarisation & Paralysis in UN Drug Control.Debate Paper No. 5, July 2002

Change of Course.An Agenda for Vienna.Debate Paper No. 6, March 2003

Cross Purposes.Alternative Development and Conflict in Colombia.Debate Paper No. 7, June 2003

Transcending Drug Control. Forward Operating Locations in Latin America.Debate Paper No. 8, September 2003

Drugs and Conflict in Burma (Myanmar). Dilemmas for Policy Responses.Debate Paper No. 9, December 2003

Coca or death? Cocalero movements in Peru and Bolivia.Debate Paper No. 10,April 2004

A Pointless War. Drugs and Violence in Brazil.Debate Paper No. 11, November 2004

All editions of the series are available online in English and Spanish at:www.tni.org/reports/drugs/debate.htm

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C r i m e a n d G l o b a l i s a t i o n - D e c e m b e r 2 0 0 4 3

E D I T O R I A L

ynthetic drugs will become Public Enemy No.1in the period ahead, according to the Execu-tive Director of the United Nations Office onDrugs and Crime (UNODC), Mr. AntonioMaria Costa.1 “With determination, with prop-

er communication and acting together, we shall tame thisbeast as well – though it will take time,” he announced.During the past 15 years synthetic drugs – and ecsta-sy (MDMA)2 in particular – have become the drug offashion, among users as well as drug control officials.Amphetamine Type Stimulants (ATS)3 are proving tobe a genuine growth market in the drugs industry aswell as for drug control bureaucracies.But what do wereally know about the global synthetic drug market?

In 2003, the UNODC tried to put together a globaloverview of that market.The first results were pub-lished in its 2003 Global Illicit Drug Trends and in itsEcstasy and Amphetamines Global Survey 2003.The lat-est figures were made available in UNODC’s WorldDrug Report 2004. In this issue of Crime and Global-isation, we will take a close look at the figures, with aspecial focus on a specific part of the global ATS mar-ket: the global ecstasy market.This briefing will not lookinto the perceived danger of ecstasy use.Opinions dif-fer on the health consequences, and on the effective-ness of its prohibition.

It is useful to keep in mind that the real global ATSproblem is with (meth)amphetamines, which is morepotent and carries more health risks.According to theUNODC’s World Drug Report 2004, about 0.73% ofthe global population, some 29.6 million people (age15 and above, annual prevalence), consume (meth)-amphetamines. That is 3.5 times more than globalecstasy consumption,which is estimated at 8.3 millionpeople, 0.21% of the global population.

The Netherlands is considered by most law enforce-ment and drug control agencies as the world’s majorproduction and trafficking centre for synthetic drugs.According to the United States Drug EnforcementAdministration (DEA) “80 percent of the world’s ecsta-sy is produced in clandestine laboratories in the Netherlandsand, to a lesser extent, Belgium”.4 On which basis this

assumption was made is not at all clear, however, giventhat at the time,attempts to measure the global ecsta-sy industry were non-existent.

Statistics relied on fragmentary information based onseizures, police operations against specific traffickingand production organisations, and soft intelligenceinformation.Until 2003, the UNODC had been unableto produce reliable statistics on ecstasy-type sub-stances due to incomplete reporting in the AnnualReports Questionnaires (ARQ) filed by the memberstates on which the statistics are based.Ecstasy is onlytreated separately from (meth)amphetamines since therevised ARQ was introduced by UNODC in 2001.Thelack of adequate data did not enable UNODC to pre-cisely monitor trends in synthetic drug production fromyear to year.

Notwithstanding the scant information available, theDEA’s ‘80 percent’ is quoted almost everywhere now-adays.Whether or not The Netherlands is the largestecstasy producer is difficult to say because of the lackof comparable data and independent scientific research.Though seizures are considerable and law enforcementseems successful against trafficking networks con-nected to The Netherlands, anything occurring else-where is largely unknown. Ironically, the paradox of suc-cessful law enforcement is that it triggers stigmatisa-tion: i.e. the more you seize, the more you appear tobe the source of the problem.

In a recent threat analysis, the Dutch police estimatedthat the Dutch ecstasy industry supplies approximate-ly 32-42% of the global demand.5 Although TheNetherlands and,to a lesser extent,Belgium are impor-tant producer countries, their importance might be lessthan is generally assumed. The only other plausibleexplanation is that The Netherlands is losing its prima-ry position. In this briefing, the position of The Nether-lands in synthetic drug production and trafficking isdescribed and an attempt made to explain why Dutchgroups have gained and maintained prominence on theglobal ecstasy market since its genesis in the late1980s.

1 Statement by the UNODC Executive Director, Mr. Antonio Maria Costa, at the Commission on Narcotic Drugs46th Session, Ministerial-level Segment, 16 April 2003.2 MDMA is the abbreviation of the chemical formula of ecstasy: 3,4-methylenedioxymethamphetamine.3.Amphetamine-type-stimulants (ATS) are synthetic drugs that include the chemically related amphetamine,meth-amphetamine and ecstasy and a range of ecstasy analogues.4 Ecstasy: Rolling Across Europe, Office of International Intelligence, Drug Enforcement Administration, Arlington:August 2001.5 Nationaal dreigingsbeeld zware of georganiseerde criminaliteit,Dienst Nationale Recherche Informatie (DNRI),Zoeter-meer: July 2004

n 1995, an officer from the Dutch CentralCriminal Intelligence Information Service(CRI) compared the Netherlands’ positionin the ecstasy and amphetamine market tothat of Colombia as the main cocaine pro-

ducer1 - a comparison popular with foreignlaw enforcement agencies ever since.The Unit-ed States ‘discovered’ the increase in ecstasyuse and trafficking in that country around1995.Seizures at US airports pointed to Israelitrafficking networks, based in part in TheNetherlands and supplied by Dutch produc-ers, as the main source of ecstasy bound forthe US market. US officials and media reportsconsequently stressed the role of Israeli andDutch networks as global players meaning, infact, that they were heavily involved in the sup-ply to North America.

According to the United States’ Drug Enforce-ment Administration (DEA) in its 2001 report‘Ecstasy:Rolling Across Europe’,“80 percent ofthe world’s ecstasy is produced in clandestine labo-ratories in The Netherlands and, to a lesser extent,Belgium”.2The Netherlands was also the mainsource in Europe for amphetamines, accord-ing to the DEA, with virtually all shipmentsgoing to Britain,Germany or Scandinavia. It wasnot clear on which basis this assumption wasmade, however.Till that time, there had beenno attempts to measure the global ecstasyindustry.Statistics relied on fragmentary infor-mation gleaned from seizures, police opera-tions against specific trafficking and productionorganisations,and soft intelligence information.

Even in The Netherlands at the time, officialsacknowledged they had no real overview ofthe ecstasy industry, despite the existence ofa specialised inter-agency law enforcementtask force – the Unit Synthetic Drugs (USD).It was established in 1997 to combat synthet-ic drug production and trafficking in responseto critical remarks from European partners

about The Netherlands as the major ecstasycentre.Over time, the USD became an impor-tant centre of expertise and an information-clearing house for foreign law enforcementagencies. Despite the information gatheredover the years, the public prosecutor co-ordinating the USD, Martin Witteveen, admit-ted little or nothing was known about the busi-ness volume or identity of the major traf-fickers.3

In the US, the numbers indicating The Nether-lands being the source for ecstasy are notalways consistent.4 For 2001, the Bureau forInternational Narcotics and Law EnforcementAffairs (INLEA) of the US State Departmentcalculated a lower percentage than the 80% ofthe DEA. In 2001, more than 25.6 millionecstasy pills that could be linked to theNetherlands, were seized throughout theworld.Coupled with Interpol figures on worldseizures of ecstasy for that year (over 37 mil-lion) that amounted to approximately 68%,according to the INLEA’s 2002 InternationalNarcotics Control Strategy Report (INCSR).“From case-derived intelligence, the DEA believesthe great majority of these tablets were manufact-ured in the Netherlands,” according to theINCSR report.“Some Dutch officials suggest thatmuch of this MDMA is transiting The Netherlandsrather than produced there, but evidence to sup-port this assertion is lacking.”

The figures for the US market vary betweenUS and Dutch law enforcement agencies.TheDEA seized approximately 9.5 million MDMAtablets domestically in 2001.According to fig-ures of the Dutch USD, however, only about4 million pills seized in 2001 in the US couldbe linked to the Netherlands. That wouldmean that approximately 42% of the pillsseized in the US originated from the Nether-lands. Looking at the destination of the pillswith a Dutch connection seized worldwide,

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T H E G L O B A L E C S TA S Y I N D U S T R Y

4 C r i m e a n d G l o b a l i s a t i o n - D e c e m b e r 2 0 0 4

1 Nederland produceert de meeste peppillen, NRC Handelsblad, 26 October 1995.2 It is not always clear in subsequent testimonies of DEA officials whether the 80% indicated is the Dutch shareof the global or the US market.3 We weten niks over xtc-baronnen, Algemeen Dagblad, 1 June 2002.4 An overview of seizure data in the US is hard to get. Data from DEA’s System to Retrieve Information fromDrug Evidence (STRIDE) show a sharp increase in the number of MDMA units seized between 2000 (3,341,649)and 2001 (5,575,432).Seizure data from US Customs (USCS) show a decrease in the number of MDMA units seized,from 9.3 million MDMA tablets in FY2000 to 7.2 million in FY2001.One FY2000 seizure of 2.1 million tablets accountsfor the disparity,however.There are some overlaps in reporting between STRIDE and USCS seizure statistics. (Nation-al Drug Threat Assessment 2003, National Drug Intelligence Center, January 2003).

about 6 million were bound for the US,but notnecessarily seized in the US. This exampleshows that different law enforcement agenciesuse different data, which makes it difficult toreally assess market shares.

Ecstasy production and trafficking

The UNODC concluded in its Ecstasy andAmphetamines Global Survey 2003, that “untilrecently” The Netherlands was the world’sleader in illicit amphetamine and ecstasy manu-facture and trade, but also that The Nether-lands and Belgium are still “considered to be themajor global source of ecstasy”. Its relative impor-tance seems to be declining as ecstasy produc-tion is appearing in other parts of the world.The UNODC looked at three indicators:

1. detection and dismantling of laboratories;2. seizures of precursors; and3. seizures of ecstasy pills related to coun-

try of origin.

On all three indicators The Netherlands scores‘best’:“A number of indicators suggest that ecsta-sy production is concentrated in The Netherlandsand in Belgium,” according to the UN.How reli-able are these indicators? These global surveysare only an approximation, and the UN will bethe first to admit that. First of all, the analysisdepends to a large extent on the completionof reporting obligations and how these oblig-ations are met.They are also sometimes sub-ject to negotiations with member states whichfear being pinpointed as ‘narco-states’ due tothe UN reports.

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T h e G l o b a l E c s t a s y I n d u s t r y


While amphetamine is the ATS of choice inEurope, in South East Asia and North Ameri-ca it is methamphetamine. Two-thirds of(meth)amphetamine consumption is in Asia(18 million), mostly in East and South EastAsia (particularly Thailand, The Philippines,Japan, Korea and Taiwan). Methamphe-tamines are produced mainly in Burma andLaos, as well as in Mexico, the US and Cana-da. Canada and the US together have a consid-erable domestic market of 3.46 million.I

The vast majority of methamphetamine labsseized worldwide over the last two decades arein the US. Of all globally reported meth labsdetections in 2002, 97% were in the US: 9,024in 2002 (up from 7,990 in 2001). The majorityof these labs, approximately 95%, are consid-ered ‘kitchen’ labs capable of producing ouncequantities. The remaining five percent are con-

sidered ‘super-labs’, capable of producing fiveor more kilos of methamphetamine in a singlecook.II Despite the vast number of labs seizedin the US, the largest (meth)amphetamineconsumption and production regions are Eastand South East Asia.

Laboratories in this region tend to be signifi-cantly larger than those usually seized in theUS, but detections are less numerous. Accord-ing to the UNODC’s World Drug Report 2004,over 2001-2002, 87% of global methampheta-mine seizures took place in that region asagainst 13% in North America. Most of the 84labs detected are in China (68%), Thailand(12%), Burma (11%) and The Philippines (8%).)The production capacity of the estimated 40-50 methamphetamine factories in Burma and20-30 plants in Laos would total 800 milliontablets of speed or more each year.III

Methamphetamine

I UNODC (2004a),World Drug Report 2004, United Nations Office on Drugs and Crime, New York:United Nations.II DEA, 2001a. According to the El Paso Intelligence Center's (EPIC) National Clan-des-tine LaboratorySeizure System (NCL-SS), the majority of the ‘super-labs’ are believed to be tied to Mexican criminalgroups and are located pri-marily in the State of California. According to another DEA report on the6,394 clandestine methamphetamine labo-ra-tories seized in 2000 reported to the National ClandestineLaboratory Database at EPIC, only 126 were super-labs (Drug Trafficking in the United States, DomesticStrategic Intelligence Unit (NDAS) of the Office of Domestic Intelligence, Drug Enforcement Administra-tion (DEA), Arlington: September 2001).III According to Pitthaya Jinawat, director of the northern drug suppression centre in Thailand. (SpeedSmuggled To Thailand In Masses,The Bangkok Post, 24 August 2002).

According to the 2003 global survey,“over the1999-2001 period, 75% of all seizures of clan-destine laboratories producing ecstasy took placein The Netherlands and 14% in Belgium.The twonext prominent production sites of ecstasy are theUK (6%) and Germany (4%).” The 75% of sei-zed laboratories relates to total seizures inEurope. Curiously, the Global Illicit DrugTrends 2003 report does not give percentagesfor worldwide seizures of laboratories. If it hadcounted seizures of laboratories in the US andCanada, the percentage would go down to46%. According to the UN, “The next largestproduction site of ecstasy after Europe is NorthAmerica. A third of all clandestine laboratorydetection occurred in North America over the1996-2001 period. The clear increase in theseizure of clandestine laboratories producingecstasy in the late 1990s is an indication that notonly imports of ecstasy from Europe, but alsodomestic production, increased over this period inNorth America.” According to the UNODC,other major sources outside Europe haveappeared.The relative importance of Europemay be declining. In the mid-1990’s,West Euro-pean countries reported around 80% of allecstasy seizures; today that proportion isaround 50%.

The UNODC’s World Drug Report 2004looked at the years 2001-2002, the first yearsfor which the revised ARQ’s were available.The most striking trend was the increase ofecstasy production in East and South EastAsia, while the number of dismantled ecstasylaboratories declined in Europe and remainedmore or less stable in North America. Of allthe reported seized labs (128) in 2001-2002,43 were in The Netherlands (34%), 26 in theUS (20%), 14 in China and Hong Kong (11%),11 in Indonesia (9%), 10 in Canada (8%) and 8in Belgium (6%).The number of labs seized isa poor indicator, however, if one does notknow the output capacity combined with thetime periods in which that capacity is actual-ly used, nor the nature of the lab (just tablet-ting or genuine MDMA production). Forinstance, in 2001,17 laboratories were disman-tled in the United States.According to the UN,25 ecstasy labs were seized in The Netherlands

in 2001, though only 15 labs seized actuallyproduced MDMA. The ten other ‘labs’ weretabletting units.5 As long as more preciseinformation is not available, one could arguethus that in 2001 more labs were seized in theUS than in the Netherlands.

In terms of seizures of ecstasy precursors, theUN mentions that the highest figures report-ed in recent years pertain to The Netherlands(63% of all such seizures over the 1999-2001period), followed by Belgium (21%). As anindicator,however,precursor seizures are notvery reliable.Seizure data typically reflect largeindividual seizures,or a small number of relat-ed cases, resulting in wild fluctuations in thestatistics. Seizures often also take place intransit countries. For instance, most precur-sor seizures in Belgium and Germany have TheNetherlands as their destination.An indicationthat it is difficult to calculate production fig-ures based on seizures of precursors is the sit-uation with one of the main precursors ofcocaine,potassium permanganate.The amountof potassium permanganate seized in 2000 and2001 was equivalent to seven times the totalnecessary for cocaine production for thoseyears.These huge amounts reflect “the attitudeof many clandestine operators to purchase potas-sium permanganate far in excess of actual require-ments from a number of sellers in different coun-tries, anticipating that most orders will not be ful-filled,” according to the UNODC.6

Regarding the country-of-origin pill seizureindicator, the UN reported that “Three quar-ters of the countries reported that their import-ed ecstasy originated in the Netherlands. If onlythe responses of the countries within Europe areconsidered, the proportion of The Netherlands asa source country rises to 86%, and is thus higherfor ecstasy than for amphetamine (70%).The nextmost frequently mentioned country of origin wasBelgium, apparently reflecting a shift of criminalgroups from The Netherlands as controls weretightened.” According to the World DrugReport 2004, 69% of ecstasy pills seized orig-inated in the Netherlands, followed by Belgium(24%),Eastern Europe (18%),Germany (16%).Once again, the statistics are not reliable and

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5 Unit Synthetische Drugs, Jaarverslag 2001. Helmond: May 2002.6 Global Illicit Drug Trends 2003, United Nations Office on Drugs and Crime, New York: United Nations.

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The UNODC calculates that nearly 8.3 millionpeople use ecstasy (0.21% of the global popula-tion age 15-64). More than a third is concentrat-ed in Europe and more than 40% in North Amer-ica. The industrialised states in North America,Europe and Oceania together account for some80% of global ecstasy use. Use of ecstasy, how-ever, is spreading increasingly to Eastern Europeas well as developing countries, notably to theAmericas, Southern Africa, and the Near andMiddle East as well as South East Asia. In its 2003overview, the UNODC calculated that some 40%of ecstasy consumption worldwide was concen-trated in Europe and, following strong growthrates in recent years, amounted to almost 50%in North America. Western Europe and NorthAmerica together accounted for around 90% ofglobal use. This quite sudden shift in user datamay either reflect rising use in the developingworld or, more likely, the improved reportingmechanism of UNODC.

According to the UN, the global market forecstasy continues to expand, although at a muchslower pace than in the 1990s. While there aresigns of stabilisation or even contraction insome of the more established markets of West-ern Europe and North America, and a loss ofmomentum reported from Oceania, the marketis expanding to several developing regionswhere public resources for prevention and con-trol are scarce. China’s synthetic drug market,which is relatively new, has been characterisedby an extremely steep increase since 1997. Thereare indications that this is due to the introduct-ion of ecstasy in that year, possibly overtakingmethamphetamine in the recent period.I Onthe other hand, it is not always clear what is con-sidered ecstasy (commonly known as yaotou-wan or “head-shaking” pills) in China. Ecstasymay relate to ecstasy-type drugs, but they may

(and more likely) relate to drugs that in someway lead to a state of “ecstasy” (i.e. any one – ormixture – of a series of stimulant drugs, includ-ing methamphetamine, amphetamine or keta-mine).11

Unlike traditional plant-based drugs, the pro-duction of ATS starts with readily available che-micals in easily concealed laboratories. Thismakes an assessment of the location, extentand evolution of the production of such illicitdrugs extremely difficult, according to theUNODC. Acknowledging the difficulty of quan-tifying the volume of the illicit ecstasy industry,the UNODC nevertheless made an attempt in2003 and 2004. Based on three estimates of con-sumption, pill seizures and precursor seizures,the office calculated an annual production of113 metric tons of ecstasy (in a range of 50 – 200tons), or about 1.4 billion tablets.III In theUNODC’s Ecstasy and Amphetamines GlobalSurvey 2003, the market value was calculated.Based on an average wholesale and retail priceof respectively US$ 7 and US$ 16.63 per pill thatamounts to a wholesale market value of US$ 9.8billion and a retail market value of US$ 23.38 bil-lion. These market value estimates were notrepeated in the World Drug Report 2004.

Estimated annual production of ecstasy(metric tons)

Consumption 100 – 125

Pill seizures 50 - 75

Precursorseizures

130 - 200

Mean andrange

113 (50 - 200)

1.4 billion tablets at 80 mgper tablet

Source: UN World Drug Report 2004

The global ecstacy market

I World Drug Report 2004, United Nations Office on Drugs and Crime, New York: United Nations, 2004.According to the DEA, Chinese law enforcement officials report significant increases in domestic produc-tion of ecstasy. Most production in China is for domestic consumption, but ecstasy tablets also areimported from the Netherlands into China to meet the demand. Some laboratory operators in China mixMDMA powder with substances, such as caffeine, heroin, and ketamine, while making ecstasy pills. Giventhe availability of the precursors needed, open source reporting indicates that MDMA tablets in Chinacost only US$ 0.06 to produce, while the tablets sell for as much as US$ 9 in Guangzhou and US$ 27-36in Shanghai and Beijing. (China Country Brief 2003, Office of Strategic Intelligence, Drug EnforcementAdministration, Arlington: February 2004.)II Amphetamine-Type Stimulants in East Asia and the Pacific,United Nations Office on Drugs and Crime Region-al Centre for East Asia and the Pacific, Bangkok: April 2004.III The UNODC estimates that 10% of pills and precursors are seized.

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How reliable are these figures? Looking at the fig-ures for consumption, the estimate appears tobe exaggerated. According to the UNODC, tak-ing into account occasional, moderate andheavy use, studies show that, on average, theeight million ecstasy users consume about threetablets per week – or about 150 a year. Thisamounts to an annual requirement of about1250 million tablets, or 100 to 125 tons of MDMA(each tablet contains 80 – 100 mg). The UNODCseems to confuse annual prevalence – that inclu-des the one-time user that might have taken apill to experiment – with a much smaller groupof ‘experienced users’ that take ecstasy regular-ly. In a recent study of the Dutch drug marketcommissioned by the Dutch National CriminalInvestigation Service (DNRI), it was estimatedthat the consumption per user is more likely inthe range of 20-40 pills per year, based on stud-ies in Canada, the UK, Germany and TheNetherlands.IV According to experts, that figureis much more realistic and would even leantowards the lower end of the range. Using theUNODC’s estimate of 8.3 million users world-wide that would amount to a global demand of166-332 million pills per year. This is signifi-cantly lower than the 1.4 billion pills per year ofthe UNODC.

Calculating market values depends on what isconsidered wholesale, intermediate or retailand the different market settings around theworld. For instance, in The Netherlands (after all,the largest producer according to the UN),wholesale prices are much lower than the US$7 of the UN, which would be equal to the high-er range of retail price in The Netherlands.According to the USD, ecstasy prices per tableton the wholesale and intermediate markets areC 0.90 (from production ‘off tabletting’ locat-ions), C 1.50 (wholesale) and C 2.70 (inter-

mediate level).V During field research, infor-mants said the price per pill depended onamounts purchased. At the wholesale and inter-mediate levels prices ranged between C0.35–0.40 (for lots of 100,000 pills) and C 1.50 for100 pills.VI Street prices in some of the majorconsumption countries are not a good indicatoreither as it depends on the setting. Research inseveral countries found that users often tend tobuy larger quantities at a lower average price tobe distributed among friends and acquain-tances. The average retail price of pills thereforetends to be lower than the price of pills sold inclubs or at dance festivals.

A rough estimate by an analyst of the Dutch USDcalculated an annual world market of 500 mil-lion pills with a wholesale market value of C 0.8billion (US$ 0.96 billion) and a retail marketvalue of C 5 billion (US$ 6 billion).VII The aver-age wholesale price (C 1.60 or US$ 1.92) andretail price (C 10 or US$ 12) per pill used by theUSD analyst are much more realistic. The studyfor the DNRI did not try to estimate market val-ues but, using the figures of the USD analyst, themarket values would be C 266-532 million (US$319-637 million) wholesale and C 1.7-3.3 billion(US$ 2-4 billion) retail market value. In otherwords, among police organisations calculationsare significantly lower than the UN estimates.The reality is that the data currently available arerather crude and unbalanced. Any estimateabout global annual production and marketsvalues turns into an inadequate guesstimate. Forinstance, annual prevalence data are generallynot available outside the European Union,North America and Oceania. The significantconsumer market in East and South East Asia islargely unknown.

The global ecstacy market

IVVan der Heijden, A.W.M. (2003), De Nederlandse drugsmarkt, Dienst Nationale Recherche Informatie(DNRI), Zoetermeer: November 2003.V Unit Synthetische Drugs, Jaarverslag 2001. Helmond: May 2002. Based on quantities of 750,000.VI Blickman,T., D. J. Korf, D. Siegel and D. Zaitch,‘Synthetic Drug Trafficking in Amsterdam’, in Synthetic DrugsTrafficking in Three European Cities: Major Trends and the Involvemant of Organised Crime,Turin: Gruppo Abele,2003VII Based on 40 million pills seized worldwide and average seized percentage of 8%, combined with a esti-mated weekend use of 10 million pills worldwide and 20% of the 200 tons of PMK illegally produced annu-ally (according to the World Customs Organisation). Fossen, C.M.,‘Risk analysis, developments 1998 to thepresent’,presentation at the International Synthetic Drug Enforcement Conference (SYNDEC) on International Coop-eration, Scheveningen, 8-9 October 2003

comparison of various national figures is diffi-cult due to different means of reporting.A casein point is the numbers for Germany. For theyear 2001, the German Bundeskriminalamt(BKA) recorded 264 cases involving 2,710,417pills that could be linked to the Netherlands,while the Dutch USD recorded 119 cases inGermany involving 4,344,989 pills.7

The ecstasy industry in The Nether-lands

According to a study in 2003 commissionedby the Dutch National Criminal InvestigationService (DNRI) – a newly established nationalpolice agency in which the USD wasincorporated – the Dutch ecstasy industrysupplies approximately 78-131 million pillsannually worldwide (7-13 million for thedomestic Dutch market,43-73 million pills forthe EU market, and 28-48 million pills to therest of the world). Based on the share of pillsconsumed (on average 19 million are inter-cepted annually), the 65-99 million pills wouldamount to 32-42% of the global demand sup-plied by Dutch ecstasy production.8This is sig-nificantly less than the proportion normallycited by the DEA or UNODC,and would sug-gest that either the position of The Nether-lands as a producer has been over-rated, orthat it is losing its primary position.

Belgium,Germany and, increasingly,Poland arebecoming more important production count-ries in Europe. Other countries in EasternEurope also seem to be emerging as produc-ers. Outside Europe, the Dutch position ischallenged by increased production in China,South East Asia and the Pacific, often with alink to Chinese crime networks and, some-

times,Dutch expertise.North America seemsto have maintained its own level of production.Supply in The Netherlands seems to be abun-dant, however, and wholesale and retail pricesare dwindling.The market in Amsterdam (alle-gedly one of the world’s major internationalmarketplaces) is saturated and is changingfrom a seller’s market to a buyer’s market,according to informants. Retail prices in Bel-gium and Germany are reaching the low pricesin the Netherlands.9 Nonetheless, accordingto USD officials, the easy availability from localcriminal groups and the low price of ecstasyin the Netherlands,as well as the links to expe-rienced trafficking organisations, serve as dis-incentives to foreign ecstasy traffickers settingup their own domestic production chains. Inother words, common reasoning seems to be:Why bother taking the risk of setting up acomplex production infrastructure whenample supply can be found somewhere else?On the other hand, more and more labs havebeen discovered outside the Netherlands.According to the USD,“more and more signalsindicate The Netherlands can no longer be labelledas the exclusive producer of synthetic drugs.”10

Why Dutch groups have gained and maintainedprominence on the global ecstasy market sinceits genesis in the late 1980s is still very muchan open question. Assuming Dutch criminalsare no more intelligent or daring than thoseof any other nationality, a combination of fac-tors has more than likely contributed to a(probably momentary) advantage and pre-dominance in the illicit ecstasy.These factorsare both structural and accidental (specific fac-tors occurring in the right place at the righttime).None of these factors are unique for TheNetherlands, but the combination at the right

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7 Rauschgiftjahresbericht 2002 Bundesrepublik Deutschland, Lagezentrale Rauschgift, Bundeskriminalamt (BKA).Wiesbaden: 2002; USD 2001, 2002.8 Van der Heijden, A.W.M., De Nederlandse drugsmarkt, Dienst Nationale Recherche Informatie (DNRI), Zoeter-meer: November 2003.The calculations were based on prevalence data combined with use patterns and analysisof chemical waste from ecstasy labs and illegal waste dumps.9 Blickman et al. 2003; Korf, D.,T. Nabben and A. Benschop, Antenne 2000.Trends in alcohol, tabak, drugs en gokkenbij jonge Amsterdammers. Amsterdam: Rozenberg Publishers, 2001. According to an observer with contacts in theecstasy scene in the south of the country and the Randstad, the “business is on its beam ends”. At the wholesalelevel, ecstasy pills go for C 0.45 or C 0.90, while they used to do C 2.25 or C 2.75.“If you might sell them at all,because stocks are everywhere.” See: De criminele landkaart verandert, BN/DeStem, January 4, 2001.10 Blickman,T., D. J. Korf, D. Siegel and D. Zaitch,‘Synthetic Drug Trafficking in Amsterdam’, in Synthetic Drugs Traf-ficking in Three European Cities: Major Trends and the Involvemant of Organised Crime,Turin: Gruppo Abele, 2003; USD2001, 2002; Laboratoria xtc gaan weg uit Nederland, Het Parool, 15 March 2002.The fact that Dutch citizens appearto be involved in ecstasy production abroad may also have to do with the assistance of the USD in dismantling labsacross the border.The USD is, of course, concentrating its efforts on Dutch groups.

moment in time created and reinforced adynamic that led to a much earlier and quick-er development of the industry than any-where else. Once that position was estab-lished, impending competitors would havedifficulty challenging it until a more favourableset of conditions are in place somewhere elseand/or the conditions in The Netherlandsdeteriorate. Below, several of the most im-portant factors are described.

1.The availability of ‘routine socio-eco-nomic activities’

The natural geographic position of The Nether-lands has contributed to making it the dis-tribution centre of both licit and illicit goodsinside Europe and fromEurope to the rest of theworld. It has created alongstanding tradition asa trading and industrialnation with a well-devel-oped distribution indus-try and expertise intransport and industriallogistics and services aswell as a well-developedfinancial sector.Excellenttransport connections and the presence of sev-eral vital transport hubs along many interna-tional trade routes (e.g. Rotterdam harbourand Schiphol airport near Amsterdam) offerinternational traffickers great possibilities formoving illegal goods.11 Rotterdam is by far thebiggest seaport in Europe (and an importanttransit point for chemical products) and Ams-terdam ranks fifth. Moreover, yet anothermajor European port lies nearby in Antwerpin the north of Belgium. All three are smug-gling centres; not only for cocaine fromColombia but also bulk loads of the main pre-cursor for ecstasy, PMK, hidden in large ship-ments of chemicals from China, which findtheir way through the extensive port facili-

ties.12 Schiphol International Airport nearAmsterdam is a major hub and ranks fourthin Europe, behind London, Paris and Frank-furt,13 and third in freight, handling just overone million tonnes a year.These transport hubsare by nature extremely difficult to controlsince the intensity and concentration of largeflows of goods and passengers requires rapidprocessing. In addition, there is a broad com-mercial logistics sector that redistributesgoods overland throughout Europe via a largefleet of trucks.

The Netherlands has a significant chemicalproduction and trade sector with about 2,400companies nationwide,which is convenient inthe case of chemically produced drugs like

ecstasy. To produceecstasy, organisationsneed precursors andother chemicals as wellas laboratory equipmentthat can be obtained onthe legal market. Sincethe law on the ‘Preven-tion of Abuse of Chem-icals’ came into force inJuly 1995, controls havebecome stricter and

some of the raw materials used for synthet-ic drug production have been classified in alicensing system for 23 chemical substancesin three categories with an obligation toreport ‘dubious transactions’ in relation tothese substances. Tabletting machines andother lab equipment are not under any licens-ing system.The problem is that (apart fromthe precursors BMK and PMK) most chemi-cals have broad legal uses in the chemicalindustry. Illegal use accounts for only a smallpercentage of all use and too many controlscould damage liberalised legal economic acti-vity. Legal suppliers are thus still wittingly orunwittingly involved in selling chemicals andequipment to ecstasy producers. There is

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11 Fijnaut, C., F. Bovenkerk, G. Bruinsma and H. van de Bunt,‘Eindrapport georganiseerde criminaliteit in Neder-land’, Enquête Opsporingsmethoden, Bijlagen VII, Kamerstuk 24072 nr. 16,Tweede Kamer, vergaderjaar 1995–1996.The Hague: SDU, 1996.12.Zaitch, D., Trafficking Cocaine: Colombian Drug Entrepreneurs in the Netherlands. The Hague: Kluwer Law Interna-tional, 2002; Kleemans, E., M. Brienen, H. van de Bunt, Georganiseerde criminaliteit in Nederland.Tweede rapportage opbasis van de WODC-monitor,Onderzoek en beleid nr 198.The Hague:Ministerie van Justitie,Wetenschappelijk Onder-zoek- en Documentatiecentrum (WODC), 2002.13When controls at Schiphol increased, traffickers moved to the airports in Paris, Franfurt, Brussels and Londonthat can be reached in a few hours because of good overland connections.

The natural geographicposition of The

Netherlands hascontributed to making itthe distribution centre of

both licit and illicit goodsinside Europe

always a weak link in the chain when a lot ofextra money is involved.

The trucking industry is very vulnerable.Not only must companies depend on driverswho might want to earn some extra moneyon the side, traffickers also sometimes smug-gle drugs aboard as a stowaway load pickedup somewhere else. Due to stiff competitionin the transport sector, a lot of small truck-ing companies and one-man businesses havedifficulty surviving. Some drug traffickinggroups monitor the sector to target thosewith financial problems and offer them away out by transporting drugs. Traffickinggroups may also set up front stores in thetransport sector or take over insolvent com-panies. Ecstasy producers set up front com-panies, such as paint factories or chemicalwaste removal companies, to acquire thenecessary equipment and chemicals (or dis-pose of chemical by-products). The blackmarket and trafficking in precursors havebecome very lucrative because of administra-tive and police controls. Precursors are nowmainly purchased from chemical companiesabroad: in Eastern Europe (sometimes co-owned by criminal groups) and China. Someproducers have shifted to manufacturingtheir own precursors with chemicals or pre-precursors not scheduled under the law.14

Producers and traffickers also use employ-ees of legal companies. Chemists, who haveworked in large chemical companies, havehelped mediate the supply of chemicals, andthe contacts of one chemist with Chinesechemical producers were used. Another wayof camouflaging activities is to invest in amoribund bonafide company and force it to

perform certain services (stock of drugs,transports, intermediary for the purchase ofprecursors).15

This range of so-called ‘routine socio-eco-nomic activities’ contributed to the Nether-lands’ emergence as an illicit distribution cen-tre for all kinds of drugs even before ecstasybecame a popular drug.16The licit economicstructure is tapped by criminal entrepreneurs.Over the last 25 years, a semi-licit grey infra-structure has developed that facilitates the useof the goods and services of the licit econom-ic by the illicit one. The city of Amsterdamdeveloped as an international marketplacefor drug transactions. Amsterdam is “ratherunique in that every type of drug-smuggling anddistribution organisation is represented for strate-gic and logistical purposes. It is an organisation-al centre, a central brokerage point and a safehaven”, according to a DEA report of June2000. “Dutch hashish traffickers are increasing-ly distributing heroin, cocaine and amphetamineto other countries.This ‘poly-drug’ activity is beingencountered more and more frequently.” TheNetherlands is probably one of the mostimportant drug trafficking and transiting areain Europe, according to the DEA and theBritish National Criminal Intelligence Service(NCIS). 17

The ecstasy business simply tagged along andAmsterdam became the ‘logistical centre’ forthe ecstasy business. Foreign export organisa-tions have rather easy access to suppliers dueto the large number of different nationalitiesin the city. Along with the goods, Amsterdamoffers the necessary human resources, whichmakes it a ‘full service’ market.The Netherlandsand Amsterdam, in particular,offer “an interna-

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14 Houben, H., ‘Een eerste verkenning’: Fenomeenonderzoek Synthetische Drugs. Den Bosch: InterregionaalRechercheteam Zuid-Nederland, 1996.15 Kleemans, E., E. van den Berg and H. van de Bunt, Georganiseerde criminaliteit in Nederland. Rapportage op basisvan de WODC-monitor, Onderzoek en beleid nr. 173.The Hague: Ministerie van Justitie,Wetenschappelijk Onder-zoek- en Documentatiecentrum (WODC), 1998.16 Farrell, G. (1998),‘Routine Activities and Drug Trafficking:The Case of the Netherlands’, International Journal ofDrug Policy, 9: 21–32; Farrell noted a connection between the low prices for illicit drugs in The Netherlands andthe importation of these substances that could be related to the volume of licit international trade.The main prin-ciple behind the theory of ‘routine socio-economic activities’ is that crime starts in areas where there are potent-ially motivated perpetrators and suitable targets while proper surveillance is lacking. Under these circumstancesthe routine activities of potential criminals offer opportunities for crime. From this theory, one can deduce thatthe smuggling of illegal goods ‘tags along’ with the trade in legal goods (Van der Heijden, 2001).17 Huisman,W., M. Huikeshoven and H. van der Bunt (2003), Marktplaats Amsterdam,The Hague: Boom; NationalCriminal Intelligence Service, UK Threat Assessment 2002. London: NCIS 2002; Europe fails to stem rising drug tide,The Guardian, 29 August 2000.

tional meeting point for potential partners, opera-tions and intermediations to arise: native Dutch,British, Colombians, Surinamese, Antilleans,Turks,Yugoslavs, Russians, Israelis, Chileans, Italians, allnationalities likely to be found and linked in TheNetherlands.” 18

Amsterdam is the centre of ‘organised crime’in the Netherlands. The USD considers thelocal crime scene (mainly native Dutch at itstop level) one of the world’s main ecstasy pro-ducers. The necessary links and methods ofsetting up (new) trafficking lines are easy tofind through the existing contacts in the over-all drug trade. USD officials say 70% of theirecstasy investigations nationwide are linkedwith the Amsterdam area and production isshifting more and more from the southernprovinces where it was located traditionally tothe capital and the adjacent region. Internation-al transactions, which are now the main out-let for the industry, are concentrated in thecity. The USD discovered an increase in so-called ‘cocktail’ drug transports, indicating theexistence of specialised trafficking orga-nisations stockpiling several kinds of drugs inThe Netherlands for further distributionthroughout Europe, mainly the United King-dom.“Most UK traffickers appear to obtain theirsupplies from The Netherlands, and thereforehave potential access to more than one type ofdrug,” according to the NCIS. British nation-als act as brokers in Amsterdam.

For those familiar with the drug business, it isa simple matter to find the initial contactsneeded to set up a trafficking line. Pills neednot even be physically available when con-ducting business. During an investigation intoan Israeli trafficking network, the main orga-niser acted as a broker arranging supply for dif-ferent trafficking operations and an inter-mediary between Dutch producers and clientsbased abroad (in the US, Canada and Aus-tralia).He called around the world with his six

or seven GSM phones. He likely never evensaw the ecstasy pills.“We see international traf-fickers fly in, check in to one of the top luxuryhotels, make their deals and then leave,” says acriminal investigator at the inner city districtoffice of the Amsterdam police.Pills are some-times produced and delivered ‘on request’.“This can take place at remarkable speed.Traf-fickers book a night in the Hilton and order pillsin the evening, which are subsequently producedand ready to be picked up the next morning afterbreakfast.”19 This pattern is not found exclu-sively at the wholesale level. A police officergave one example of a US citizen who tried tobuy just 7,000 pills.

2.The characteristics of organisedcrime in The Netherlands

The Dutch underworld is predominantly com-posed of frequently overlapping, business-ori-ented networks.There is hardly any traditionof territorial control, monopolies or protect-ing a specific market niche.20 Organised crimein The Netherlands is characterised by cross-border movements of people, money andgoods – so-called transit criminality withextensive international connections. Thestereotype of a hierarchical, pyramidal crimi-nal organisation hardly exists in the Nether-lands.The traditional perception of organisedcrime had already been questioned by fieldresearch into the local drug market in Ams-terdam in the early 1990s.21 Cannabis andcocaine importing organisations and laborato-ries for amphetamines and ecstasy were notsmooth running, long-term operations. Eachimport and production operation was a pro-ject in itself, which could function for sometime (even years) within a set framework andoperated by the same people. In general, theywere temporary joint ventures.

Instead,a much more diverse picture emerged:one of extended fluid networks involving a

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18 Huisman et al., 2003; Zaitch, 2002a, p. 251.19 Blickman et al., 2003; Interview with a drug expert on the Rotterdam police force in: Ondanks tanende rol bli-jft Nederland ‘hofleverancier’ van xtc, Rotterdams Dagblad, 8 December 2000.20Van Duyne,P.C.,R.F.Kouwenberg en G.Romein (1990),Misdaadondernemingen;ondernemende misdadigers in Ned-erland, Gouda Quint, Arnhem;Van Duyne, P.C. (1995), Het spook en de dreiging van de georganiseerde misdaad.TheHague: SDU; Fijnaut et al., 1996; Kleemans et al, 2002; See also: Klerks, P., Groot in de hasj.Theorie en praktijk van degeorganiseerde criminaliteit, Antwerp: Kluwer, 2000.21 Korf, D. and H.Verbraeck, Dealers en Dienders. Amsterdam: Criminologisch Instituut Bonger (Universiteit vanAmsterdam), 1993.

multitude of individuals, often formed into‘cliques’ or groups,either connected by meansof loose or close relationships or with thecapacity to establish those kinds of relation-ships rather easily if necessary through ‘friendof friends’.Within those networks are ‘nodes’and persons with more power than others.Many of these relationships are not very sta-ble. Specific interests of groups and personal-ities of bosses can clash, leading to dissolutionof the cooperation or even violent conflicts.New ‘action-sets’ then arise to ‘do the job’ bymeans of shared investments, lending out logis-tics and/or employees or forming longer-termcoalitions.22 Criminal co-operation is oftendirected towards gaining reciprocal benefits orresolving mutual problems. Groups poolresources and contacts to obtain precursorsand formulas,especially at the ecstasy produc-tion level,where supplies of raw materials andproduction tools are a problem. Semi-manu-factured products are also exchanged.This way,‘buffers’ are created to counter the unevensupply of precursors.Criminal groups seem toact more as ‘partners in crime’ than competi-tors.23 The synthetic drug market is a ‘freemarket’, according to USD officials.Anyone canmove in with the right contacts.

One case description shows the level of co-operation and exchange at the productionand ‘first hand’ distribution (i.e. first buyer fromproducer) levels. The case involved a groupoperating in the southern part of the Nether-lands. Five individuals in this group wereinvolved in synthetic drug production. Theyclosely collaborated with about six otherDutch criminal groups also involved in produc-ing and trafficking synthetic drugs, but whowere implicated in other criminal activities aswell.Co-operation between the groups includ-ed supplying precursors,means of productionand end products, as well as exchanging per-sonnel and expertise.Various chemists workedfor several groups. A chemistry professor

taught one group to produce ecstasy, while alawyer provided another group with the for-mula for ecstasy he had found in court files.Some of the groups and individuals were large-scale suppliers of precursors and productionequipment bought at ordinary chemical busi-nesses, second-hand markets or through frontstores in Eastern Europe. Deliveries weremade from the southern provinces of Limburgand Brabant, and the Amsterdam area. Somegroups were also involved in setting up labo-ratories in Eastern Europe.One of the groupsused a mobile lab in a steel container on atruck.Another group operated a very sophis-ticated lab built partly underground. Amphe-tamines were smuggled to Scandinavia, theUK and Amsterdam markets. Ecstasy wasmainly distributed to Amsterdam and the UK,but also to Italy and Spain.When one grouphad a shortage, they bought from another, andbatches of amphetamine were exchanged forecstasy.24

3. Historical advantages

These patterns of organised crime activitiesand the existence of a broad set of beneficial‘routine socio-economic activities’ in the legit-imate economy were some of the precondi-tions for the emergence of a very dynamic andflexible illicit industry in The Netherlands in thelate 1980’s, when ecstasy became a populardrug and part of a new youth culture.Two his-torical advantages proved to be very benefi-cial. First, prior to the emergence of ecstasyas a popular drug, local criminal groups in thesouthern provinces of Limburg and North-Brabant,on the other side of the border in Bel-gium,had established a primary role in produc-ing and trafficking amphetamines to Scandi-navia (where amphetamines were very popu-lar), the UK and Germany in the 1960s and1970s.These southern producers traditional-ly had ties with large-scale hashish traffickersin the west of the country in the Randstad.25

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22 Fijnaut et al., 1996: 55-56.23 Kleemans et al., 1998: 66.24 Houben, 199625The Netherlands is a densely populated country of towns. None of the main cities, such as the financial centreAmsterdam, the government centre of The Hague and the economic hub of Rotterdam, Europe’s largest seaport,has more than a million residents, however. All three of these key national centres are concentrated in the west-ern part of the country no more than an hour apart by train or car.This metropolitan area is often referred to asone single metropolitan area, the Randstad.

These groups managed to control a significantsegment of international hashish traffickingduring the 1980s.26

Expertise in production and trafficking werethus available, as well as the financial resourcesto set it up.According to one USD official, theamphetamine producers were a rather smallsector at the time.Law enforcement identifiedfour major professional amphetamine labora-tories in the 1980s: three in the south of TheNetherlands and one in the western part ofthe country.The names of those ‘amphetaminepioneers’ return in current investigations intothe ecstasy industry. One of the sons of suchan amphetamine pioneer also entered theecstasy business.The southern amphetamineproducers did not initiateecstasy production butlearned quickly whenecstasy appeared to bepopular.27

Second,The Netherlandsand Belgium were amongthe first countries wherethe new youth culturedeveloped. Ecstasy cameto The Netherlands in the1980s through alternative circles and trend-set-ting globetrotters who had their first experi-ences in Goa or Ibiza and the subsequent‘summer of love’ in the United Kingdom.Thefirst dealers and producers were of the ‘afi-cionado-type’,people who used ecstasy them-selves and sold to friends and acquaintances.The real expansion came in the late summerof 1988 when the first large-scale house par-ties were organised in Amsterdam. Peoplefrom this scene set up the first small labs in TheNetherlands.There were virtually no links tothe more traditional underworld. Some of theorganisers of these house parties kept ecsta-sy distribution to themselves;either to launder

their profits or to ensure good quality ecsta-sy was available. Some of the house-scenes fellapart in those days because of bad quality pills.Amsterdam also became one of the distribut-ion centres for the rest of Europe. Pills weresmuggled from Amsterdam to London andIbiza (which was also supplied from Spainitself).28

The international character of the new youthscene was instrumental to the spread ofDutch-produced ecstasy.Raves were organisedall over Europe with international participa-tion.According to a small-time Dutch traffick-er who was part of that scene in the mid-1990s, many would look to Dutch partici-pants for the supply of cheap ecstasy pills.The

more entrepreneurialamong them grasped theopportunity and con-tacts were used to sup-ply pills also outside theraves.They hid their sup-plies in cars or swal-lowed amounts of 750-1000 pills and travelledacross Europe.Small ad-hoc networks of inde-pendents formed the

main distribution channels in Europe. Theabsence of border controls in the EU facilitatessmuggling by independents or ‘crews’ – looseassociations of people, which form, split, andcome together again as the opportunity aris-es – willing to take the chance because of pricedifferences in Europe.29

Until 1988 and 1989, most ecstasy tablets intrend-setting Amsterdam were still imported.In 1989, ecstasy in pills and powder camefrom Spain. Some MDMA was imported fromthe US in powder form and tabletted in TheNetherlands, and there was also a small sup-ply of powder, capsules and badly produced,

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26 Fijnaut, C., ‘Georganiseerde criminaliteit in Nederland: De rol van autochtone criminele groepen’, EnquêteOpsporingsmethoden,Bijlagen VIII,Deelonderzoek I,Kamerstuk 24072 nr.17,Tweede Kamer,vergaderjaar 1995–1996.The Hague: SDU, 1996: 19ff.27 Husken, M. and F.Vuijst, XTC smokkel. Amsterdam: Meulenhoff, 2002.28 De Loor, A., Het middel ecstasy bestaat niet, Stichting Adviesburo Drugs, Amsterdam 1989 (1995); Adelaars, A.,Ecstasy. De opkomst van een bewustzijnsveranderend middel. Amsterdam: In de Knipscheer, 1991; Korf & Verbraeck,1993.29 Interview with Dutch trafficker, December 2004; Gruppo Abele, 2003; Paoli, L., N. Güller and S. Palidda (2000),Pilot Report to Describe and Analyse Local Drug Markets. First Phase Final Report: Illegal Drug Markets in Frankfurt andMilan, Lisbon, EMCDDA.

The internationalcharacter of the new

youth scene wasinstrumental to the

spread of Dutch-producedecstasy

crumbly pills – with different levels of MDMAor related substances like MDA, PMA etc.–from small domestic labs that developed aspart of the scene. In the spring of 1989, mostecstasy pills were so-called ‘Stanleys’,manufact-ured on a large scale by the German chemi-cal company Imhausen just before ecstacy pro-duction was prohibited.These pills were indus-trially produced, and had a constant purity of110 mg of MDMA.When ecstasy was put onthe list of drugs with ‘unacceptable risks’ in theDutch Opium Act in November 1988,observers at the time stated that ‘bonafide’ecstasy producers who were part of the raveculture at the time, increasingly left the mar-ket and some of the initial dealers retreatedfrom the open circuit of discotheques andhouse-parties. The traditional amphetamineproducers and experienced hash traffickersincreasingly filled the gap.30

As the market started to expand, some ofthese groups combined their expertise inamphetamine production and their profitsfrom hash trafficking to replace the originalproducers who came from the user scenethemselves but shied away when the businessbecame tougher.31They had little to no expe-rience in running a clandestine enterprise, letalone the financial resources to back it up.Thefirst professionally manufactured pills fromillegal laboratories appeared on the Amster-dam market in the spring of 1990, accordingto observers at the time, and several differenttypes of pills quickly arrived on the scene.From the summer of 1989 until the summerof 1990,real ecstasy was difficult to find.By theend of 1991, the supply of good quality pills wasno longer a problem.32

In February 1992, a major ecstasy productionand trafficking organisation was dismantled.Leaders of this group belonged to the estab-lished underworld of Dutch criminal organi-sations in Amsterdam and Rotterdam thathad become major players in national andinternational hashish trafficking in the 1980s.

The group owned labs, imported precursorsfrom Belgium and ran export trafficking lines,mainly to the UK. It even ran a counter-sur-veillance operation to check on police activi-ties. It produced millions of pills within its tenmonths of operation and had an estimatedbusiness volume of C 135 million according toforensic experts. Profits were estimated at C33 million though in the end only some C 7million were confiscated. One of the keyorganisers was Belgian physician DannyLeclère, also known as the ‘ecstasy professor’because he had apparently revolutionised theproduction process.He had learned the tricksof the trade from the southern ‘amphetaminecookers’. Leclère used to organise hashishtransportation with the established hashentrepreneurs of the 1980s.33 This was aclear indication that the traditional under-world had established itself in the ecstasymarket, particularly the export market.

According to a police report, by the mid-1990s most producers were in the business forthe money and were no longer the ‘aficiona-do type’.The bottleneck in the business was,and still is, the supply of hard-to-get precur-sors, in particular PMK. In July 1995, the lawon ‘Prevention of Abuse of Chemicals’ cameinto force.The law tightened controls and putthe raw materials used for synthetic drug pro-duction under the control of a licensing sys-tem.To obtain precursors, traditional amphet-amine producers had the advantage of pre-vious experience in obtaining the main precur-sor for amphetamine,BMK,which is scheduledunder the same control mechanism and couldbe produced by the same chemical manufact-urers. Ecstasy producers needed contactseither within the chemical industry,companiesabroad where controls were less strict orwithin the black market.The result was thatsmall independent producers were even moremarginalised,and the business became monop-olised by big ecstasy producers with ties to‘organised crime’ able to procure the neces-sary chemicals illegally.

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30 Adelaars,1991;Korf & Verbraeck,1993.Drugsspecialisten:XTC-markt is vervuild,NRC Handelsblad,16 April 1992.See also:Van Duyne, P., Het spook en de dreiging van de georganiseerde misdaad.The Hague: SDU, 1995.31 Houben, 199632 Korf & Verbraeck, 199333Van Duyne, 1995; Fijnaut et al., 1996; Husken & Vuijst, 2002. See also: Grote drugsbende bij actie opgerold, NRCHandelsblad, 15 February 1992; De strijd tegen de georganiseerde misdaad, NRC Handelsblad, 21 July 1993.

The production and distribution chain is some-times divided according to certain stages in theprocess (acquisition of precursors,productionof ecstasy powder, tabletting, distribution, dis-posal of chemical waste by-products). Some ofthe groups involved in a particular stage do notnecessarily know other parts of the organisa-tion. Synthesis often takes place at a differentsite from that where the chemicals are proces-sed,mixed or tabletted.There are,however,stillalso small groups of two or three people whomanage the whole production process as wellas the initial distribution stage. According toone mid-level dealer, large producers with tiesto organised crime presently have a monop-oly,providing 90% of the Dutch domestic mar-ket and exporting some 80-90% of their pro-duction. Original small producers, who manu-factured small amounts for their own net-works, have been pushed out of the market,mainly because intensified precursor controlsmade it more difficult to get hold of the rawmaterials.One informant stated that in the olddays a few ‘hobbyists’ might produce a fewkilos of MDMA tabletted in a few runs.Nowa-days,big producers deliver pills from 100 kilosof MDMA in just one run.

The ecstasy market expanded both nationallyand internationally and established criminalgroups have become more entrenched.This hasresulted in the following dynamics: (a) a scal-ing-up of the business in production and traf-ficking; (b) professionalisation and concentra-tion of production and trafficking; and (c)extension of the range of activity. Comparedto the early 1990s, production shifted fromhome labs to bigger professional labs; traffick-ing shifted more to export with larger amountsof tablets; and the amounts involved in whole-sale and mid-level dealing have increased.Theoriginal ‘aficionados’ and ‘hobbyists’ have beenreplaced by criminal organisations in the busi-ness for the money.On the whole, the impres-sion is that a more commercial, business-likeattitude has replaced the original ‘alternative’characteristics of the ecstasy industry. An-other reason for the apparent dominance oflarge-scale producers may be that they are sim-

ply more competitive. They lead the marketbecause they are able to produce higher quan-tities at a cheaper price.Small labs have no sub-stantial part of the market because they sim-ply cannot produce in bulk.The market seemsto be saturated and because the domesticmarket is relatively small, the export of pills hasoffered the main sales potential.

4. Specific law enforcement actions

Paradoxically, Dutch police unwillingly pro-moted ecstasy production in the early mid-1990s. In an attempt to bring down criminalorganisations involved in ecstasy production,some prosecutors and criminal intelligenceofficers allowed an undercover agent to infil-trate several organisations of ecstasy produc-ers. This operation was part of a desperateattempt to crack down on drug trafficking net-works after Dutch law enforcement authori-ties discovered in the mid-1980s that in theprevious decade some rather large hashishtrafficking organisations had developed whichoperated on an international scale. At thetime, these criminal organisations had alsobecome involved with ecstasy production andtrafficking. Initially, the cure proved to beworse than the disease. Irregularities led to thebiggest law enforcement crisis ever in TheNetherlands. In their eagerness to ‘score’, cer-tain prosecutors and segments of the policeignored a good part of the penal code andbegan long-term secret investigations aimed at‘the upper levels of organised crime’.

They embarked on a series of controversialinvestigation techniques (involving criminalundercover agents, large-scale uncontrolleddrug deliveries, illegal phone taps, clandestinehouse searches, etc.) in an attempt to bringdown these criminal organisations.The use ofundercover agents to incite people into traf-ficking is not allowed by Dutch law. Law enfor-cement officers tried to find their way aroundthese limitations, however. One such methodwas to resort to long-term infiltration, per-mitting criminal organisations to go on traffick-ing dozens of tonnes of cannabis,34 with active

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34 According to observers, diplomatic and operational pressures from the US had led to the acceptance of theseso-called pro-active policing methods in The Netherlands (Klerks, 2000).There were even rumours that 15,000kilos of cocaine had been smuggled into The Netherlands by the same means, though later investigations dismissedthat possibility.

support from the police themselves.The ideawas to target the leaders of the organisation,who were never actively involved in the crim-inal groundwork, rather than arresting thelower ranks of drug trafficking organisations.Long-term infiltration was used to cultivateinformers at the top. In order to build theircredibility, active co-operation by the policewith drug traffickers was deemed necessary todemonstrate the ability of the informers todeliver. In the end, it became completely unclearwho had the lead in these operations: thecriminal intelligence section of the police or thecriminal organisations themselves.

Several major ecstasy transportations to theUK were condoned. Even more controversialwas that some criminalintelligence officersallowed a criminal under-cover agent – a fairlysmall-time criminalknown as The Snail – toinfiltrate several organi-sations of ecstasy pro-ducers. First, he learnedthe tricks of the tradefrom one of the tradi-tional southern amphet-amine cookers.When that man was arrested,The Snail instructed others how to produceecstasy, supplied precursors and lab equip-ment, built labs and high pressure autoclavesand made repairs over a four-year period from1992-1996.35 The whole operation eventual-ly backfired when the controversial investiga-tion methods were denounced. Most organi-sations targeted by The Snail were initially dis-mantled but in subsequent court cases againstsome of the southern ‘ecstasy barons’, thecontroversial investigation methods werejudged illegal and several of the ecstasy gangleaders had to be released.36 It is not clear towhat extent this operation caused the ecsta-

sy business to expand but the actions of theundercover agent helped spread expertise onecstasy production among criminal groupswho were already eager to step into the busi-ness. On the other hand, police may also havegained valuable insights into the business.Some of the major ecstasy producers in Lim-burg are still at large, however, and in generalecstasy production is flourishing to the pointthat the market is almost saturated.37

5. Multiplier effect

The ecstasy market was still relatively new andopen in the early 1990s.Along with large-scaleproducers and wholesalers,a multitude of mid-sized and small-scale amateur enterprises ope-

rated which were some-times as much a dangerto themselves as theirdirect environment; inci-dents such as explodingstills, leaked acid andammonia emissionsresulted in small environ-mental tragedies and thepremature closure of lab-oratories which lookedmore like primitive, un-

healthy sculleries than professional factories.38

In a report on organised crime in The Nether-lands, the Scientific Research and Documenta-tion Centre (WODC) of the Ministry of Jus-tice suggests an explanation for the rise of theecstasy business in the Netherlands, specifical-ly its origin in the southern provinces. TheWODC researchers point to a phenomenonfrom sociological research on the ‘social struc-ture of entrepreneurial activity’: i.e. the impor-tance of the existence of other, similar enter-prises in the emergence of a new venture.

In such an environment, new ventures devel-op because they have a greater chance of

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35The Snail got this nickname in criminal circles because he was slow to respond when propositions were made.He first had to consult his ‘runners’ at the Criminal Intelligence Division. Husken 2000; Husken & Vuijst, 2002. Seealso:Netwerk van ‘bendes’ achter lucratieve illegale pillenhandel,NRC Handelsblad,21 June 1995;Criminele infiltrant pro-duceerde XTC met toestemming politie,Volkskrant, 30 December 1996; ‘OM verzwijgt in xtc-zaak het gebruik van eeninfiltrant’, NRC Handelsblad, 14 February 1997; De peppillen van De Slak,Vrij Nederland, 15 February 1997.36 Jaren bedrog bij politie en justitie, De Limburger, 27 April 2001; De duistere gangen van De Slak, De Limburger, 12May 2001.Two of them recently were awarded C 45,000 in indemnity, see: Topcriminelen krijgen vergoeding voor IRT-affaire, De Limburger, 8 July 2003.37 De criminele landkaart verandert, BN/DeStem, 4 January 2001.38Van Duyne, P.,‘The Phantom and Threat of Organised Crime’, Crime, Law and Social Change, 24 (1996): 341-377.

The actions of the under-

cover agent helped spread

expertise on ecstasy

production among

criminal groups

acquiring the necessary know-how, plus thesocial relations in general to expansion and thebasic confidence to start up an enterprise.Per-sonal contacts and geographical proximity areessential. WODC researchers point to aphenomenon which they describe as the‘snowball effect’: individuals involved with crim-inal coalitions eventually become more andmore independent of other people (andresources such as money, expertise and con-tacts) and start up their own venture.Whenthey do so, they involve new individuals fromtheir own social environment and the processrepeats itself in a constant process of ‘cell par-tition’.39 Some of these groups will not lastin a difficult illicit market; others will becomemore professional and expand.

Ecstasy Worldwide

A number of countries suspected of ecstasyproduction do not or scarcely appear in the UNstatistics. For instance, there is no mention ofSpain reporting lab seizures in the latest UNreports, although field research in Barcelonaindicates that rudimentary labs operate in thecity and surrounding area for local production.It is difficult to identify where pills are produ-ced, however. Pills with the logo of theBarcelona Football Club, for example,appearedto be produced in Dutch laboratories.40 Aus-tralia also does not appear in the UN statisticseither, but according to Australian Bureau ofCriminal Intelligence (ABCI) at least 12 labs

were dismantled between 1999 and 2002.According to the DEA,several large-scale ecsta-sy laboratories have been seized in the Sydneyand Melbourne metropolitan areas.The chem-icals seized at these laboratories originatedfrom locations throughout South East Asia.Australian law enforcement and customs arealso seizing increasing amounts of sassafras oilbeing smuggled through various ports of entry,such as Sydney and Melbourne. Sassafras oil isan essential oil used in the production of saf-role, a precursor chemical for MDMA.41

When one combines the quantitative informa-tion with qualitative data, the picture becomeseven more confusing.Without insight into thefunctioning of criminal networks involved inthe illicit ecstasy industry,quantitative data mayhide more than they reveal. No single organ-isation controls all aspects of production,wholesale, midlevel wholesale, or retail sales– and the networks involved seem increasinglyto globalise. Production and trafficking organ-isations arrange their activities across borders.Apart from trafficking ecstasy produced inDutch labs, Israeli groups have been involvedin production operations in The Nether-lands.42 In Belgium, production is sometimescontrolled by Dutch organisations. As Dutchlaw enforcement pressure mounts on produc-ers of ecstasy in The Netherlands, some Dutchproducers either look to Belgian producers tomeet their supply needs or establish theirown facilities in Belgium. Involvement of Dutchorganisations with labs seized in Germany has

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39Wetenschappelijk Onderzoek en Documentatie Centrum (WODC); Kleemans et al., 1998: 55; Kleemans et al.,2002: 4340 Montañes,V., M. Barruti, J. Pallarés Gómez and J.L. Domínguez Figueirido,‘The Synthetic Drug Market inBarcelona’, Synthetic Drugs Trafficking in Three European Cities: Major Trends and the Involvement of Organised Crime,Turin: Gruppo Abele, 2003.41 Australia Country Brief 2003, Office of Strategic Intelligence, Drug Enforcement Administration (DEA), Arling-ton: April 2004.42 In 1994, an Israeli group tried to set up a lab near Amsterdam, after eliminating the possibility of establishingit in Eastern Europe.The lab was discovered when it exploded. (Local operators of Dutch drug lab nabbed, JerusalemPost, 30 September 1994; Israëlische bende achter bouw xtc-lab, Het Parool, 30 September 1994) Another Israeligroup was involved with a seized laboratory in The Netherlands in 2001. Israeli, Dutch,Turkish and British nation-als were arrested.The factory was equipped to produce 120,000 pills an hour.The Israelis were violently extort-ing money in Israel to operate the lab. (Five Israelis Arrested for Running Ecstasy Factory, Jerusalem Post, 1 March 2001;Dealers werkten aan lijn naar Israël, Haarlems Dagblad, 9 May 2001)43 The first site contained approximately 150 kgs of MDMA powder, 10,000 ecstasy tablets, 100 gallons of PMK,10 separate pill presses and U.S. $200,000 in cash. (INCSR 2002, 2003) The laboratory consisted of a chemical syn-thesis laboratory and a separate tabletting operation.The production scale was 60-90 kgs per batch, correspond-ing to 428,000 to 642,000 tablets, based on a dosage unit of 140 mg of MDMA per tablet.Over 100 kgs of MDMA,over 10 kgs of amphetamine, over 100 kgs of caffeine, and over 1.5 metric tons of PMK of Chinese manufacturewere seized at the site. Most of the tablets contained a mixture of MDMA and caffeine. (DEA Microgram Bulletin,January 2003) The main suspect of Chinese descent held both a Dutch passport and an Indonesian identificationcard and had lived for years in the Netherlands. He was sentenced to death.

also been reported.The dismantling of a majorecstasy production operation in Indonesia inApril 200243 and one in Surinam in May200344, apparently to target the US market,indicates that significant production centreshave been set up outside Europe with Dutchexpertise.The DEA reports that Asian crimi-nal groups may also be producing the drug inBelgian laboratories.45

There seems to be an increasing diversificationin production. Different stages of productionare conducted at different locations, some-times even in different countries.That trendwas already observed in The Netherlands,Belgium and Germany,but seems to have goneglobal as well. In Toronto in Canada in 2003,three tabletting units were seized, 377,000pills, 120 kgs of ecstasy powder and otherequipment, such as presses, scales, dyes andvacuum packers.The alleged kingpin,a Chinesenational,was orchestrating the manufacture ofecstasy tablets,made from powder believed tohave been smuggled from The Netherlands.The network was responsible for the produc-tion of ecstasy and marijuana in Canada, thedistribution of these drugs throughout the US,and the laundering of illicit funds back toCanada and to Vietnam. Police say the labswere capable of producing more than 250,000pills every day. At its height, according to law

enforcement officers, the network involvedwas distributing a million ecstasy tablets amonth, accounting for 15 per cent of all theecstasy consumed in the United States.Anoth-er network of Chinese nationals in Canadatransporting precursors (enough to make 21.2million ecstasy pills) on a cargo ship fromShenzhen, China, was dismantled in August2004.46

Established criminal networks seem to addecstasy to their repertoire,using already exist-ing trafficking routes. In June 2004, the firstecstasy- producing unit in India was discoveredusing two ordinary pharmaceutical firms.Thecompanies were manufacturing medicine suchas paracetamol by day and synthetic drugs bynight.The organisation was linked to one of themajor criminal enterprises in the region withample experience in drug trafficking and withlinks in India, Pakistan (Karachi) and Dubai.They seemed to use established mandraxsmuggling lines to South Africa. Funds camefrom South Africa through ‘hawala’ brokers,with Dubai as the nodal point. Officials of theIndian Narcotics Control Bureau (NCB) saidthey saw an emerging pattern in the trade.‘‘Small scale units are manufacturing raw mate-rials or finished products such as MDMA, whichare then being shipped to South Africa, a distribu-tion hub for Europe.’’47

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44 Suriname rolt grote producent van xtc op, de Volkskrant, 5 May 2003.The amount of MDMA seized at the sitecould have produced 500,000 ecstasy pills. According to press reports, the lab had a capacity to produce a millionpills per day.45 NDIC, National Drug Threat Assessment 2004, National Drug Intelligence Center, April 2004.46 Ecstasy seized at Canadian ports of entry soared from multi-thousand quantities in the 1990s to over 2 mil-lion in 2000.The seizure rate stabilised in 2001 and 2002, with approximately 1.9 and 1.8 million tablets, respec-tively. In 2003, however, the amount of ecstasy seized almost tripled compared to 2002 (5.8 million tablets).Thisexponential increase is supported by a shift towards the importation of large powder MDMA shipments from West-ern Europe for re-processing to tablet form in Canada. In a 2003 Canadian investigation involving the dismantlingof a major tabletting facility, intelligence determined that an Asian organised crime group was responsible for thisoperation. (RCMP 2003, 2004) See also: Police Smash North America Wide Organized Crime Network, CFSEU PressRelease, March 31, 2004; Raids nab U.S. ecstasy ring based in Toronto, National Post, April 1, 2004; Police in Canada,U.S. Crack Major Drug Ring, Globe and Mail, April 1, 2004; Ecstasy Ingredient Found On Ship,Vancouver Sun, 25 August2004.47A lab synthesising MDMA and a tabletting unit were dismantled near Hyderabad.Next to 350,000 ecstasy tabletsand 13 kg of MDMA (enough to manufacture 150,000 tablets), huge quantities of Mandrax (1.3 tonnes) and meth-amphetamine tablets were seized. According to a newspaper report, one shipment was seized trying to transport2.2 tonnes of MDMA (equivalent to 27,500,000 units) to Dubai. Packed as sweets and cosmetics, the drugs wereexported to countries in West Asia, but also went directly to Kenya,The Netherlands and West Europe. See: Rs100 cr drug racket busted,Times of India, 8 June 2004; ‘Ecstasy’, drugs worth Rs.100 cr. Seized,The Hindu, 8 June 2004;DRI busts narcotics racket in Karnataka,Times of India, 9 June 2004; Gujarat drug bust to Dawood dope trail,The Indi-an Express, 10 June 2004; West’s love pill is made in India,Times of India, 12 June 2004.Mandrax, a variant of methaqualone, is used in South Africa. It is often smoked in a homemade bottle-pipe withlow-grade cannabis, a practice called “smoking the White Pipe.” South Africa is the only place in the world wherethis odd usage is prevalent. Mandrax is both smuggled into and produced in South Africa for domestic consump-tion.Mandrax laboratories obtain most essential precursors from India,China and Pakistan.The Indian ethnic com-munity traditionally controls Mandrax trafficking.The ports of entry are Mombassa, Kenya, with Dar Es Salaam,Tanzania, and Maputo, Mozambique following closely behind. (INCSR 2001, 2002)

One more trend is that ecstasy productioninside and outside The Netherlands is increas-ing in sophistication and scale.According to theRoyal Canadian Mounted Police (RCMP),recent trends in Canada include polydrug man-ufacture and multi-site operations (differentstages of synthesis and subsequent manufactur-ing of pills are conducted at different locations).Overall,clandestine synthetic drug laboratoriesare larger and more sophisticated.The Euro-pean Union reports that the number of pro-duction facilities is relatively stable,but the pro-duction capacity, due to advances in method-ology, use of sophisticated equipment for themanufacturing of synthetic drugs, use of spe-cialists etc. has resulted in an ever-increasingproduction efficiency and capacity.48

Finally, there is apparently a growing differen-tiation on the market in pill quality in severalcountries, with high quality pills emanatingfrom The Netherlands and Belgium and lowquality pills being produced domestically (Rus-sia,Hong Kong,Vietnam).This does not neces-sarily mean the cheap low quality pills are pro-duced entirely domestically.There are reportssuggesting that MDMA powder may be import-ed from Europe to North America, Australiaand South-East Asia, where it is tabletted.Thismay provide an opportunity to adapt tablets tolocal needs in terms of both purity and com-position, i.e., addition of other substances.Facilities that reprocess tablets into “watereddown” versions, i.e.,where tablets are ground,diluted,sometimes mixed with other drugs,andthen re-tabletted, have been discovered inThailand,Cambodia and Canada.There is a sig-nificant danger that the health risks associat-ed with such tablets may be much higher thanthe equivalent ecstasy drug sold in Europe.

Production in the United States

As discussed before, the assumption that 80%

of the ecstasy in the US originated from TheNetherlands does not seem to stand up on thebasis of reported lab seizures and other indi-cators such as MDMA levels in pills in NorthAmerica.The US and Canada together,accountfor nearly 30% of worldwide lab seizures.Despite the prominent position of the US onthe UN list, the US National Drug IntelligenceCenter (NDIC) in its ‘National Drug ThreatAssessment 2004’ stated:“Most of the MDMAavailable in the United States is produced in clan-destine laboratories located in The Netherlandsand Belgium and, to a much lesser extent, in otherforeign countries such as Canada and Mexico.Domestic MDMA production remains limited, asevidenced by very few domestic MDMA labora-tory seizures.”49 True, the amount of seizedecstasy labs dwarfs in comparison with seizedmeth labs (12 against 9,024 in 2002),but is stillsubstantive in a global context (20%). In addi-tion, the US market is characterised by theavailability of MDMA-like substances withhallucinogenic and stimulative effects, scarce-ly found in dismantled labs in Europe. USauthorities seem to be in a state of denial asfar as domestic ecstasy production is con-cerned being mainly concerned with domes-tic methamphetamine production.

According to the NDIC, most clandestineecstasy labs seized in the US are only capableof producing small amounts (gram quantities)per production cycle, although a few werecapable of producing kilogram quantities.Pressreports, based on law enforcement informa-tion, however, indicate the existence of large-scale labs capable of producing millions ofpills.50The NDIC admits that the quantity ofMDMA produced in source areas is largely un-known due to unsubstantiated data concern-ing laboratory capacity estimates and limita-tions in seizure data. The NDIC refers tosources abroad, but it might apply to the US.Data provided by US authorities are not

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48 Drug Situation in Canada 2003,Criminal Intelligence Directorate,Royal Canadian Mounted Police (RCMP):Ottawa,July 2004; Serious Crime Overview Drugs 2004,The Hague: Europol.49 NDIC, 2004; emphasis added.50 In October 2001, a major MDMA laboratory in Escondida, north of San Diego, was seized.The highly sophis-ticated laboratory was capable of producing 1.5 million ecstasy tablets a month (ONDCP Drug Policy Informa-tion Clearinghouse, Profile of Drug Indicators, San Diego, California, June 2004). In December 2002, a lab was dis-covered that had been operating for or at least two years in Allentown (PA) and was capable of producing million-tablet batches of ecstasy. (Lab Mass-Produced Ecstasy,Agents Say,The Philadelphia Inquirer, 19 December 2002; VeryLarge Ecstasy Laboratory Seized in Bangor, Pennsylvania, DEA Microgram Bulletin, June 2003).Whether or not theseamounts were actually produced is unknown, but that also applies to labs seized outside the US.

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Another explanation for the wrath of the US inregard to the ecstasy industry in The Nether-lands could be that singling out The Netherlandsis politically biased. The profound differences indrug policy and law enforcement methodsbetween the two countries create tensions. TheUS government has little appreciation of theliberal Dutch drug policy approach. There is astrong tendency to blame the liberal Dutch forthe remarkable increase in ecstasy consumptionin the US at the end of the 1990’s, without con-sidering the domestic dynamics that may haveled to an increased demand. Mark E. Souder,Chairman of the US Government Reform Sub-committee on Criminal Justice, Drug Policy andHuman Resources of the House of Represent-atives said on Dutch national television that ifThe Netherlands does not decide to enforceecstasy production and trafficking moreaggressively, he would not rule out tougher traderules or other sanctions.I Souder has beendisturbed by the Dutch attitude for years. “I be-lieve they are trying to do the right thing,” he saidearlier of Dutch officials, “but there is a hugedifference in how we approach issues.We have amore moral base; they don’t have a moral base.”To prove his point, Souder claimed that lessthan 20 percent of the Dutch population attendschurch regularly.II

Although such radical measures have not beenput into force, all kinds of diplomatic and mediapressure is applied to force the Dutch to adaptto US strategies in the fight against ecstasy. In1999, the drug czar of the Clinton Administra-tion, General Barry McCaffrey listed The Nether-lands as an area of ‘emerging concern’ alongwith Cuba and North Korea.III “Perhaps due toa combination of geography (The Netherlands isa commercial and transportation hub for West-ern Europe) and ambivalent drug policy, TheNetherlands is a significant drug-producing na-tion,” McCaffrey said about the prominent posi-

tion of the Dutch in ecstasy and marihuana pro-duction. In 2000, the US Embassy in The Hagueproposed a ‘three-pronged effort’ (politicalengagement, training and enhanced consulta-tion at the working level, and ‘public diploma-cy’) to improve bilateral law enforcement co-operation.IV According to some Dutch policeofficers, that ‘public diplomacy’ resulted in a lotof pressure from the US to crack down on ecsta-sy trafficking and production in The Nether-lands. They also said US officials did not hesitateto use access to certain media in their cam-paign.V The DEA constantly offers ‘friendlyadvice and support’ to the Dutch government.According to a DEA official, there is little supportat the higher levels of drug enforcement in TheNetherlands for current police tactics.VI On theother hand, at lower levels there is no wideappreciation of the criminal investigation meth-ods of the DEA either. An interviewed Amster-dam police officer was not very impressed withthe DEA. He mentioned as an example a requestto use an undercover agent against a ‘small-time’ dealer who handled some 5,000 pills atmost. The DEA wanted to get him to 50,000 orhigher, and subsequently crack down on the‘whole ecstasy ring’ that they had created in thefirst place. The request was denied. According tothe police officer, the DEA has little or no exper-tise in traditional police work and basically useonly undercover operations.

Problems also arise around the extradition ofDutch citizens to the US on charges of ecstasytrafficking. Dutch citizens are extradited withonly marginal examination of formalities, andno further scrutiny of the evidence, the criminalprocedure or the judicial process. Due to differ-ences between the Dutch and the US criminaljustice system, this has led to protest amongdefence lawyers and law experts, as well as drugpolicy experts. Due to the discrepancies in thecriminal justice system, they claim Dutch citi-

US-Dutch controversies

I Amerikaanse infiltratie, Zembla (VARA\NPS), 19 June 2003.II Dutch Drug Trade,Attitudes Disturb Souder, Journal Gazette, 14 November 2001.III Testimony before the Senate Committee on Armed Services, Subcommittee on Emerging Threats and Capabilitieson the Department of Defense’s Role in US Drug Control Policy.Washington DC: April 1999. McCaffrey based histestimony in large part on the article, Holland’s Half-Baked Drug Experiment, in the influential journal ForeignAffairs (May-June 1999).The article is full of wrong figures and manipulated quotes.IV INCSR 2000, 2001V Blickman et al., 2003VI VS wil grondige aanpak drugsbendes, Algemeen Dagblad, June 25, 2001.

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zens don’t get a fair trial by Dutch standards. Theprocedures regarding the use of undercoveragents and incitement to the criminal practicein the US are not allowed in the Dutch system;and the widespread institution of plea bargain-ing by which suspects can accuse others inexchange for a reduction in criminal charges, isconsidered unjust because cases are not takento court and consequently there is no judicialcheck. In 2002, a judge ordered more informa-tion from the Dutch government about thecriminal procedure and the judicial process ofthe US to examine whether suspects would geta fair trial, and subsequently suspended theextradition of Dutch citizens. The governmentresponded that the judge’s decision would have“damaging effects on the relations” with theUS.VIIThe decision of the lower court was over-ruled.

Although US authorities compliment Dutch lawenforcement co-operation, US officials routine-ly criticize The Netherlands. In the annual Inter-national Narcotics Control Strategy Report TheHague is pressured to comply with the USapproach. “The U.S. and The Netherlands agreeon the goal (to reduce production and traffic ofillicit drug, the most recent report said, “butdiffer over which law enforcement methodologywill be most effective in achieving it. The Dutchcontinue to resist use of controlled deliveries andcriminal informers in their investigations of drugtraffickers. They are also reluctant to admit theinvolvement of large, international drug organi-zations in the local drug trade and do not usetheir asset forfeiture rules often in narcoticscases.”VIII In March 2003, a new agreementbetween the countries was signed that specifi-

cally addressed these issues and, according tosome observers, it is increasingly merging theDutch criminal justice system with US demands.The Minister of Justice rejected these criticisms,but admitted that The Netherlands “had beenconfronted twice with a genuine threat to belabelled as a major drug exporting country by theUS, which could have had direct consequences forthe economic relations with the US.” IX

The Dutch government is undermining its owncarefully designed drug policy by signing theseagreements, according to opponents. In addi-tion to the (secret) number of US police officersalready active in The Netherlands, the StateDepartment will appoint a new Global IssuesOfficer and the DEA will install a special agentand analyst to supervise law enforcement oper-ations. All DEA agents stationed at the Americanembassy in The Hague enjoy diplomatic immu-nity. This means, amongst other things, thatAmerican agents cannot be held accountable oreven questioned in the event of irregular oper-ations. Instead of co-operation, Dutch lawenforcement is being integrated into the Amer-ican system and fused within a transatlanticenforcement regime. A legal system is formingin which enforcement agencies can selectivelyappropriate or revise the regulations of bothnations, thereby evading control by the legalsystems of both countries.X For instance, whilethe Dutch system is very strict on undercoveroperations, it is remarkably lenient on phonetaps. In the US, it is the other way around. Thiskind of thing is used in joint investigations toexchange information and circumvent nation-al legal restrictions.

VII ‘Rechter schaadt band met de VS’ and Veroordeeld in VS en geen rechter gezien, NRC Handelsblad, Decem-ber 16, 2002.VIII INCSR 2003, 2004IX Ontwerpbesluiten Unie-Verdrag;Verslag algemeen overleg van 19 juni 2003, over bilaterale ‘law enforce-ment’ besprekingen tussen de VS en Nederland,Tweede Kamer, Kamerstuk 2002-2003, 23490, nr. 285, 9 July2003.X Uitermark, J.& P.Cohen (2003),The Netherlands as a branch of American law enforcement?,Amsterdam:CEDROCentrum voor Drugsonderzoek, Universiteit van Amsterdam.

US-Dutch controversies

always consistent. While the UN reports 9labs seized in 2002 and 17 in 2001, El PasoIntelligence Center’s (EPIC) National Clandes-tine Laboratory Seizure System (NCLSS) datashow that law enforcement agencies report-ed 12 domestic ecstasy lab seizures in 2002compared with 10 seizures in 2001. UN fig-ures are based on reports provided by nation-al governments.

Pill seizure data also show a sharp decline inimported pills.According to data collected byEPIC, the number of ecstasy tablets seizedarriving from foreign source or transit coun-tries has decreased sharply from 8,071,127 in2000, to 6,699,882 in 2001, to 3,395,036 in2002.51This might indicate that more pills areimported through trafficking networks not yetidentified or that there is greater supply fromdomestic production, or both. According tothe UN,“increased interest in domestic ecstasymanufacture is also exemplified by increased lev-els of precursor seizures in 1998-2001. In termsof ecstasy precursor seizures,most of the seizuresin the USA concerned safrole, often in the formof sassafras oil.” PMK, the main precursor inEurope, is seized in the US at far lower levelsthan in Europe. A different range of precur-sors is available for diversion or differentcriminal groups specifically target differentprecursor chemicals. A growing number oftablets that are being sold as ecstasy containvaried substances, or combinations. Accord-ing to the UN, “it may also be that, withincreased competition, drug trafficking organiza-tions are also importing ecstasy tablets fromSouth East Asia, where tablets are more likely tobe multi-drug combinations.”52 In 2003 and2004, there was a remarkable increase inseizures of sophisticated labs in Canada, ope-rated by Asian nationals. Indications that Chi-nese networks have been trafficking to the USexisted before. Already in 2000, Chinesepolice uncovered a syndicate that specialisedin smuggling ecstasy to the United States. In

the course of the investigation,Chinese autho-rities arrested several suspects and seized100,000 tablets bound for the UnitedStates.53

The main emphasis of US law enforcement,nevertheless, was on ecstasy originating fromThe Netherlands and Belgium.An explanationcould be that law enforcement agencies in theUS have a partial overview based on specificoperations. For a while, in close collaborationwith Dutch police, they mainly targeted Israelitrafficking networks with suppliers in TheNetherlands. One operation typically pro-duces additional leads for other similar oper-ations,resulting in a ‘snowball’ of cases with thesame or connected suppliers and traffickingnetworks, as became clear from case analysesand interviews with USD officials. A particu-lar case started in 1996,but a spin-off was stillbeing used in 2003,based on so-called free-evi-dence gained from the initial investigations.54

The same can be said about the sudden emer-gence of Dominican trafficking networks.Moreover, conclusions on Dutch ecstasy’sshare of the US market are drawn from a lim-ited amount of ecstasy pills seized. Nearly 3.2million people used ecstasy in 2001.Using therange of 20-40 pills per user per year, 64–128million pills are needed to satisfy the US mar-ket.55 Approximately 9.5 million ecstasy pillswere seized domestically in the US in 2001. Inother words, conclusions are based on only7.5–15% of the market.

Eastern Europe

According to several sources, significant ecsta-sy production is taking place in Eastern Europeand the Baltic countries, although very fewecstasy labs are reported to the UN as seizedin the region.Ecstasy is produced in significantquantities in Poland, and law enforcement offi-cials estimate that Poland is one of the lead-ing suppliers of amphetamines to European

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51 NDIC, 2004.52 UNODC, 2003b.53. International Narcotics Control Strategy Report 2000, Bureau for International Narcotics and Law EnforcementAffairs, United States Department of State,Washington DC: INLEA, 2001.54 Blickman et al., 2003; Huisman et al., 2003; Graafland, P., ‘International co-operation in investigation’, presenta-tion at the International Synthetic Drug Enforcement Conference (SYNDEC) on International Cooperation, Scheveningen,8-9 October 2003.55 According to the NDIC,NSDUH data for 2002 indicate that 1.3 percent of individuals aged 12 or older – near-ly 3.2 million people – used ecstasy in 2003. (NDIC, 2004).

markets.56 According to the European Mon-itoring Centre for Drugs and Drugs Addiction(EMCDDA) in a report on candidate Centraland Eastern European Countries (CEECs),synthetic drug production has grown in thatregion, due to weak regional control mecha-nisms.“The initial lack of awareness, experienceand proper legal regulation in the CEECs has cre-ated an ideal atmosphere for the development ofillegal laboratories. Lack of controls on the precur-sors, especially, has aided illegal production.”57

With the entry of CEEC’s like Poland and theBaltic countries in the EU new opportunitieswill arise.

Organised crime groups in Poland producesome of the highest quality amphetamines inthe world for bothexport and domesticconsumption.They con-trol substantial financialresources and legallyregistered companiesare used to launder illic-it profits and obtain nec-essary chemical compo-nents.They also co-oper-ate with internationaldrug traffickers to smug-gle drugs into, out of and through the coun-try.These groups often make use of existinglegal laboratories and employ experiencedchemists to produce amphetamines that are90-100% free of impurities. Laboratories areusually located in remote areas,where they areoperated for three to four months beforebeing moved to a new location. Syntheticdrugs are sometimes produced in the legal,permanent laboratories of chemical companiesand universities. European law enforcementofficials estimate that Poland fulfils more than25 percent of Europe’s amphetaminedemand.58

According to Interpol and Polish police, dur-ing the 1990s, Poland became one of the

biggest producers of amphetamine in Europeand most of it was smuggled out to the West,mainly to Sweden and Germany.According toone police officer,Swedish government figuresin 2000 showed only 50% of ecstasy pills therecame from The Netherlands, down from 90%a few years before.59 Similar development hadtaken place earlier with amphetamine produc-tion. Until the early 1990s, the supply ofamphetamines in North Western Europe waslargely in the hands of Dutch citizens residingin the southern provinces of Brabant and Lim-burg.After the fall of the Berlin wall and polit-ical changes in Eastern Europe, the marketstarted to change and the Poles proved to beskilled competitors.Their share of the marketin Germany and Scandinavia rose from less

than 10% to between20% and 26%.Accordingto Polish law enforce-ment, 60% of the seizedamphetamines in Scandi-navia is produced inPoland nowadays. Thispattern may repeat itselfin the ecstasy trade.According to the UN-ODC, an eastward shiftof clandestine ecstasy

production is now under way, similar to thespread of clandestine amphetamine manu-facture a decade ago. For the past few years,on average,one or two laboratories have beenseized in Eastern Europe. Eastern Europeangroups have the advantage that precursorsneeded to produce ecstasy are more readilyavailable there while precursor control mea-sures in Western Europe have increased.Smallecstasy labs and marijuana plots are being setup for the local market, sometimes in collab-oration with Dutch citizens.60

Although Western law enforcement officersfeared that after the fall of the Soviet Union,Russia’s thousands of experienced chemistswould start mass-producing synthetic drugs

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56 USD 2001, 2002; INCSR 2002, 2003; UNODC, 2003a.57 European Monitoring Centre for Drugs and Drug Addiction, 2002 Report on the drug situation in the candidateCEECs. Lisbon: EMCDDA, 2002.58 INCSR 1999, 2000; INCSR 2000, 2001.59 Ondanks tanende rol blijft Nederland ‘ hofleverancier’ van xtc, Rotterdams Dagblad, 8 December 2000.60Van Duyne, 1996; CDPC, 1999; UNODC, 2003b; BKA, 2001 and 2002; DEA, 2001a; G.J.N. Bruinsma,‘Misdaad-dreigingen uit de nieuwe lidstaten van de EU’, Justitiële verkenningen, jrg. 30, nr. 6 (2004), pp. 36-50.

An eastward shift ofclandestine ecstasy

production is now underway, similar to the spread

of clandestineamphetamine manu-facture a decade ago

for the local and European markets, thishypothesis seems to have been borne out toonly a minimal extent.Ecstasy is largely import-ed from Western European countries, partic-ularly The Netherlands, and to a lesser extentfrom Poland.As a high MVD (Russian Ministryof the Interior) officer put it,“there is no needto produce drugs that can be easily and cheaplyimported.” 61 The deputy head of the RussianCustoms State Customs Committee’s depart-ment for combating drug smuggling predicted,however, that the Baltic States would soonreplace The Netherlands as the main supplierto Russia of synthetic drugs.The Baltic coun-tries, formerly transit points for such drugs,areevolving into major producers of ecstasy madefrom precursor chemicals imported from Rus-sia. In 2003, there were several reports by boththe MVD and Federal Security Service (FSB)that MDMA labs now exist in Russia.Althoughecstasy tablets produced in Russia are of lowquality, the low prices (sometimes as low asUS$ 5) are attractive in comparison to the US$20 typically charged for Dutch ecstasy tablets.In addition, a new trafficking route has appear-ed. In response to the continuously increasingdemand and higher prices in Russia, therehave been several cases of trafficking amphet-amine and ecstasy from Estonia to Russia.

In 1999,Estonian police found evidence of lab-oratories believed to be producing ecstasy.Estonian, Finnish, and Swedish authoritiesbelieve that ecstasy laboratories in Estonia aresupplying the Nordic and Baltic markets.Theregion may also be receiving ecstasy fromnearby Latvia.62 In Latvia, there is no evidenceof either amphetamine or ecstasy production.Police point to a large chemical industry inLatvia during the Soviet era as indicative ofpotential for production.63 The expertise iscertainly available.Already in December 1992,11 million ecstasy tablets were seized at theFrankfurt airport.The shipment from Riga inLatvia was on its way to The Netherlands.Theringleader was a Dutch citizen who resided in

Belgium. An investigation by Belgian, Dutch,German and Slovak police uncovered a crimi-nal ring that had bribed the director, deputydirector and chief chemist of a Riga state-owned pharmaceutical company to manufac-ture ecstasy and other synthetic drugs.64

Ecstasy prices have remained low in Estonia;an indication of domestic manufacture.Finlandfears that Estonia’s accession to the EU andSchengen arrangements could lead toincreased ecstasy trafficking into Finland. InAugust 2003, Estonian officials seized a pillpress, various chemicals and 150 kilograms ofliquid MDMA in Tallinn that could have pro-duced approximately 750,000 ecstasy tablets.The MDMA apparently originated in Russia. Itwas the largest ecstasy laboratory ever seizedin the Baltic and Nordic countries.Police claimto have reliable information that Lithuanian-produced pills are exported to Russia andSweden, and perhaps other countries. In thetwo-year period from 2000-2001, seven labo-ratories that were producing amphetamine,ecstasy, and precursor chemicals were shutdown in Lithuania.The laboratories were well-equipped, efficient, and produced drugs forexport. In 2002-2003, ten well-equipped labo-ratories producing amphetamines,ecstasy, andprecursor chemicals were seized.65

China and South East Asia

Remarkable is the sudden appearance of Chinaand South East Asia, Indonesia in particular, asmajor producers since the new reporting mech-anism was introduced by the UNODC.Accord-ing to the secretary of the INCB, H. Schaepe,Asian countries are gradually taking over ecsta-sy production from The Netherlands due toincreased law enforcement.66 Europol notedthat the involvement of organised crime groupsin the production of synthetic drugs in China(the main source of precursor chemicalsrequired for both amphetamine and MDMA

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61 Paoli, L., Illegal Drug Trade in Russia, Freiburg: Max Planck Institute for Foreign and International Criminal Law,2002.62 DEA, 2001a; INCSR 2003, 2004.63 INCSR 2001, 2002.64 Xtc voor Nederland uit Letse staatsfirma, Het Parool, 7 January 1993.65 INCSR 2000-2003.66 Zorgen VN over Nederlands drugsbeleid,Trouw, 23 February 2001.

production, i.e.BMK and PMK respectively) andin South East Asia generally is likely to becomea growing concern for global law enforcementagencies.Very little information is available con-cerning MDMA production in Asian countries,however.There are no generally accepted esti-mates as to the amount of MDMA producedor the number of MDMA laboratories operat-ing in these countries, according to the USNational Drug Intelligence Center (NDIC).67

As mentioned before, “ecstasy” in East andSouth East Asia is used as a term to describeany drug in tablet form,whether or not it con-tains MDMA. Reports indicate that the ecsta-sy tablets available in the region contain mix-tures of various substances and sometimes noMDMA at all.This contrasts with the situationin Europe and the United States, where thetrend over the past years has been towardshigh purity single entity ecstasy tablets, con-taining MDMA as the only active ingredient.From a law enforcement perspective, the sig-nificant regional differences in tablet compo-sition also raises doubts about the widely heldbelief that the majority of ecstasy tablets seenin countries of East and South East Asia, andin Australia, are imported from Europe,according to the UNODC.There is, however,little information reported to UNODC toclarify this. Evidence for MDMA powder man-ufacture in that region is still limited, althoughthere are anecdotal reports suggesting thatlocal ecstasy is almost as available as Europeanecstasy in the region. In 2001, Hong Kongreported cheap ecstasy tablets probably man-ufactured in the Asian region rather than inEurope, and that the amount of the locallymade tablets is increasing dramatically.68 Inter-estingly, Canada is the only country that hasreported similar adulterants and diluents inecstasy-type substances as countries fromEast and South East Asia.

In 2000, the NDIC, the DEA and the US Cus-toms Service (USCS) in their ‘Joint Assess-

ment of MDMA Trafficking Trends’ voiced con-cern that crime groups from Mexico, Colom-bia or China would become involved in ecsta-sy production and trafficking towards the US.Although at the time, no organisations fromthese countries had made strong moves towardlarge-scale MDMA production,the same advan-tages found in The Netherlands – access to pre-cursor chemicals and to smuggling routes to theUS – were present and sometimes more preva-lent in Mexico, Colombia, and China. If theseadvantages would be exploited, the productiondominance of groups in Belgium and TheNetherlands could be challenged. The prof-itability and relatively low threat associatedwith ecstasy production and trafficking couldentice these groups to enter the market. Mex-ican groups were probably the greater threatbecause of their experience in producing anddistributing amphetamine and meth-amphetamine.69 Four years later, there is littleevidence of Colombians and Mexicans enter-ing the ecstasy market on a large scale,althoughtrafficking to and through these countries hasincreased.Chinese ecstasy production and traf-ficking groups, in and outside the People’sRepublic, are increasingly involved, however.

Chinese crime groups have exceptional possi-bilities on the ecstasy market.Apart from accessto the essential precursors and trained chemistsin China, there are connections with experi-enced producers in The Netherlands andworldwide distribution possibilities throughChinese communities abroad wherein they canhide. Chinese groups are co-operating withDutch groups in supplying the precursors PMKand BMK for ecstasy and amphetamine produc-tion in The Netherlands and apparently inexporting pills.The Amsterdam police noticedthe emergence of Chinese groups in the ecsta-sy business already in 1997.70 A survey oforganised crime in The Netherlands showed amainly Chinese organisation (some with Dutchnationality), active in heroin trafficking fromSouth East Asia, diverging precursors, and pro-

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67 Europol, 2004; NDIC, 2004.68 UNODC, 2003b.69 Joint Assessment of MDMA Trafficking Trends, National Drug Intelligence Center, Johnstown (PA): July 2000.70 In 2001, ethnic Chinese were involved in shipping 14,000 litres of BMK and 3,000 of PMK to a laboratory inLimburg through the port of Rotterdam. (Supervangst grondstof xtc was een toevalstreffer, Rotterdams Dagblad, 11January 2002; Milde eisen tegen smokkelaars recordpartij xtc-grondstoffen, Rotterdams Dagblad, 10 April 2002) Estab-

lished Dutch groups are involved with importing precursors from China. A former financial adviser to one of the

ducing and trafficking ecstasy and amphe-tamines. In 2003,a Dutch-Chinese national wasarrested who had been importing precursorand might have been involved with eight ecsta-sy labs in The Netherlands.71

Nationals of East and South East Asia are alsooften involved in producing and trafficking inthird countries with substantive Asian commu-nities such as Canada and Australia.DEA officesthroughout South East Asia have reported anincrease in the ecstasy trafficking throughoutthe region, including the discovery of significantMDMA laboratories in China, Hong Kong,Tai-wan, Malaysia and, most notably, in Indonesia.The increasing demand for ecstasy and theavailability of precursor chemicals from Chinaand Vietnam – a major producer of sassafrasoil – provide evidence that nations in SouthEast Asia are increasingly vulnerable to beco-ming havens for large-scale MDMA manu-facturers.The Chinese kingpin in Canada waslinked to the Big Circle Boys gang, a Triad-likeorganisation.Some ecstasy traffickers in Chinaare linked directly to the US.72 Australianpolice also have noted an increase in ecstasyimports with links to Triad groups from SouthEast Asia. Ethnic Chinese were involved in amassive 340 kilogram MDMA shipment to Syd-ney, Australia – enough to make 4.25 millionecstasy tablets.The load was secreted betweenfrozen Chinese won ton pastry sheets and thesuspects tried to escape to Hong Kong. Thecontainer originated in The Netherlands.73

A Dutch-Chinese operator,who had been run-ning the ecstasy labs in Indonesia that wereseized in April 2002, had connections to Chi-nese nationals in Malaysia and Hong Kong forthe import of the precursor PMK. Intelligence

indicated that the laboratory had been in oper-ation for about three years, and that approxi-mately 3.5 metric tons of PMK had alreadybeen processed prior to the laboratory’sseizure.With the necessary caution about esti-mates, that amount could have produced some43,750,000 pills.Additional investigations of theDEA indicated widespread distribution of theseIndonesian-produced tablets in the UnitedStates, Australia, Burma, the People’s Republicof China and elsewhere.74 According to theUNODC, the Indonesian case “confirmed thegrowing co-operation between criminal operatorsin the region, based on colonial and ethnic ties, toincreasingly share the risks of acquisition of pre-cursor chemicals and equipment, drug powdermanufacture, and tabletting into the final prod-uct.”75

Nine ecstasy laboratories were seized in 2001,among them only two were classified as small-scale or ‘kitchen’ laboratories. Most of theselaboratories were believed to have beentabletting laboratories. Jakarta’s Police Nar-cotics Division chief Carlo Tewu remarked thatmany of the ecstasy pills were produced local-ly.“That’s why ecstasy is relatively easy to obtainhere.” The seizure of the large-scale unit in2002 seems to have given rise to a cottageindustry of ecstasy, often fake pills. Accordingto Tewu: “Many of the ecstasy producers wearrested recently are not part of larger syndi-cates… They are freelancers, risk-taking entrepre-neurs with smaller capital who see potential in theecstasy business while the larger ones are not run-ning.” Tewu said that freelancers produced ec-stasy in small quantities in private homes inresidential neighbourhoods,with about two orthree people in each house making as few as50 pills a day.“They produce the pills on demand,

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major Dutch hash entrepreneurs of the 1990s was arrested for supplying precursors from China to five ecstasylabs. (Boekhouder de Hakkelaar aangehouden, Het Parool, 17 March 2001) See also: Strijd om macht op xtc-markt, HetParool, 22 February 1997.71 Kleemans et al., 2002. Lang onderzoek leidde tot oprollen xtc-lab, BN/DeStem, 4 June 2003. In a court case in TheNetherlands the public prosecutor alleged that a Dutch based Chinese lab operator in The Netherlands was instruct-ing two Chinese citizens to produce ecstasy for a fee of C 175,000 per person. (Vraagtekens bij ‘toevallige ontdekking’xtc-laboratorium, Rotterdams Dagblad, 11 April 2003).72 In June 2001, tablets from seizures in two DEA San Francisco investigations were linked to the same sourceas a 300,000-tablet seizure in Shenzhen, China that had occurred days before. Although the San Franciscoseizures were much smaller than the Shenzhen seizure, the capabilities of these trafficking groups appear to besignificant. (DEA, 2004b)73 $30M Drug Seizure Cracks Crime Syndicate, Sydney Morning Herald, 18 October 2001; Police seize Australia’slargest-ever haul of MDMA, AAP, 21 June 2004; Long route to record ecstasy bust, Sydney Morning Herald, 22 June2004.74 DEA Microgram Bulletin, January 2003.75 UNODC, 2003b.

it’s not mass production.”76 Nevertheless,occa-sional larger scale labs are still seized.

Other South East Asian countries are alsoinvolved in ecstasy manufacturing often witha link to Chinese nationals. An ecstasy-tablet-ting lab was seized in Thailand in 1999.ThreeChinese citizens were arrested with links toThe Netherlands and Indonesia. Some labo-ratories in the border area between Burmaand Thailand may already be producing rela-tively inexpensive ecstasy for the local marketssince 1999.There were unconfirmed reportsthat traffickers associated with the Burma-based United Wa State Army (UWSA),alreadyinvolved in large-scale methamphetamine pro-duction, were producing ecstasy as well thatsold in Thailand for about one fourth the costof European produced ecstasy. 77 Accordingto the Bangkok Post,“a naturalised Dutch Chi-nese chemist, said to be one of the best and high-est paid in the business,has spent nearly two yearsin Wa laboratories experimenting with the initialproduction and training local chemists.” Apparent-ly, the Wa succeeded in upgrading its versionof ecstasy to European standards,according tounidentified security and narcotic officials.78

Conclusions

A restructuring of the global ecstasy marketseems to be taking place with more regional pro-ducers supplying their adjacent regional markets.The importance of The Netherlands might havebeen less than was generally assumed,or it is los-ing its earlier leading position and original advan-tages.The global ecstasy market is still expand-ing – in particular outside the original consump-tion regions like Western Europe,North Amer-ica and Australia – and this leads to the displace-ment of labs to other areas around the world.Across the globe, ecstasy production is increas-ing in sophistication and scale.There seems tobe a greater diversification in production.Differ-ent stages of production are conducted at dif-ferent locations, sometimes even in differentcountries.Established criminal networks seem to

add ecstasy to their repertoire, making use ofpre-existing drug trafficking routes.

No single organisation controls all aspects ofproduction, wholesale, mid-level wholesale, orretail sales, and the networks involved increa-singly seem to globalise.National borders seemto be losing their importance,while criminal net-works involved in the ecstasy industry are organ-ising their supply internationally.Without insightinto the functioning of criminal networksinvolved in the illicit ecstasy industry, it is notpossible to understand the functioning of themarket.While at a certain moment The Nether-lands provided a set of beneficial conditions forthe development of an illicit ecstasy industry, adifferent set of conditions could favour thedevelopment of productions facilities and traf-ficking lines elsewhere.

In contrast with traditional plant-based drugs,theillicit ecstasy industry is not bound to specificcultivation areas.The industry is a very dynam-ic and flexible enterprise, and will thus adaptquickly to law enforcement actions, changes indrug consumption fashions and the resultingmarket transformations.There are signs that net-works of Chinese nationals in different countriesworldwide are acquiring a position on the inter-national ecstasy market,while in Eastern Europeconditions also seem to offer opportunities.The potentially favourable sets of conditions aredifficult to predict nevertheless as they dependon several factors occurring at the right time.

The peculiarities of the illicit ecstasy industrychallenge the conventional supply side drug con-trol approach even more than traditional plant-based drugs control,where they have not provedvery effective anyway. Furthermore, changes inthe quality and purity of the pills that result fromsupply control strategies may have dangerousconsequences for users. Since the supply ofecstasy – as with other drugs – has been impos-sible to control, this seems to call for anapproach based on harm reduction measures to,at least,prevent serious health consequences forusers.

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76 Drugs abuse and trafficking: How low can you go?The Jakarta Post, 27 December 2001; Laksamana.net, 24 August2002, quoting the The Straits Times from Singapore.77 USD 1999, 2000; INCB 2000, 2001; INCSR 2002, 2003.78 Ecstasy to flood Thai market,The Bangkok Post, 19 October 1998; Wa eye ‘ya ee’ domination,The Nation, 15 Jan-uary 2003.

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USEFUL WEBSITESEuropean Market Ecstasy Trafficking http://www.narcomafie.it/emet/

European Market Ecstasy Trafficking http://www.narcomafie.it/emet/

mdma.net http://www.mdma.net/

United Nations Office on Drugs and Crime (UNODC)http://www.unodc.org/unodc/en/research.html

Australian Crime Commissionhttp://www.crimecommission.gov.au/

Royal Canadian Mounted Police (RCMP)http://www.rcmp.ca/crimint/ci_reports_e.htm

Bureau for International Narcotics and Law Enforcement AffairsInternational Narcotics Control Strategy Report (INCSR)http://www.state.gov/g/inl/rls/nrcrpt/

Drug Enforcement Administration (DEA)http://www.usdoj.gov/dea/index.htm

National Criminal Intelligence Service (NCIS)http://www.ncis.gov.uk/

National Drug Intelligence Centerhttp://www.usdoj.gov/ndic/

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Ecstasy has become a popular drug over the past15 years. Its rise was closely connected to a newyouth culture, which began at the end of the1980s. National and international drug controlagencies responded to ecstasy’s growingpopularity in their traditional manner: theyprohibited the substance. As a result, a new illicitindustry emerged and ecstasy was added to thestock of illicit drugs supplied by criminalnetworks. Ecstasy and other amphetamine typestimulants will become Public Enemy No.1 in theperiod ahead, declared the Executive Directorof the United Nations Office on Drugs andCrime (UNODC), Mr. Antonio Maria Costa.

Little is known about the illicit ecstasy industry.Over the past decade, The Netherlands hasbeen pinpointed as the main producer country,but statistics have relied on fragmentaryinformation based on seizures, police operationsagainst specific trafficking and productionorganisations, and soft intelligence information.In 2003, the UNODC tried to put together aglobal overview of that market.

In this briefing, we will take a close look at thefigures of the global ecstasy market, as well asthe position of The Netherlands in syntheticdrug production and trafficking. An attempt willbe made to try to explain why Dutch groupshave gained and maintained prominence on theglobal ecstasy market since its genesis in the late1980s.

Without insight into the functioning of criminalnetworks involved in the illicit ecstasy industry,it is not possible to understand the functioningof the market. While at a certain moment, TheNetherlands provided a set of beneficialconditions for the development of an illicitecstasy industry, a different set of conditionscould favour the development of productionsfacilities and trafficking lines elsewhere.

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Founded in 1974,TNI is an inter-national network of activist-schol-ars committed to critical analysesof the global problems of todayand tomorrow. It aims to provideintellectual support to thosemovements concerned to steerthe world in a democratic, equi-table and environmentally sus-tainable direction.

The Crime and Globalisation pro-ject examines the synergybetween globalisation and crime.It looks at the criminogeniceffects of globalisation,on the onehand, and new discourses aboutan underground “axis of evil” ofdrug trafficking, transnationalorganised crime and internation-al terrorism, on the other. Theproject aims to stimulate criticalthinking about mainstream dis-courses,which turn a blind eye tothe criminogenic effects of glob-alisation, while seeking to makelinks between the ‘criminal under-world’ and political terrorism.

As regards the criminogeniceffects of globalisation,the projectis concerned with the number ofpeople being forced to “migrateinto illegality” due to impoverish-ment and marginalisation. It isalso concerned with the rise incorporate or white-collar crimeas economies become more andmore deregulated.

As regards the ‘axis of evil’ of drugtrafficking, trans-national organ-ised crime and international ter-rorism,currently being construct-ed as the new major global secu-rity threat, the project is con-cerned with the body of multilat-eral agreements put in place ‘tofight the scourge’.These are beingadopted on the basis of vague def-initions, scant information andtenuous links, and have seriousconsequences for civil liberties,human rights and national sover-eignty.

T R A N S N A T I O N A L

Download the report The ecstasy industry (265 KB)

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Transcript of Download the report The ecstasy industry (265 KB)