Estimating money laundering volume from drug trafficking in Russia

In conditions when 90% of drugs illegally traded in the Russian Federation are produced abroad, new guidelines are needed to reduce the profitability of drug business in Russia and reduce the attractiveness of its market for transnational criminal groups supplying drugs to the country. Such guideline is an assessment of money laundering scale in the drug business. In this paper, the assessment was carried out using the input-output method, which allows to obtain a sectoral structure of income from various types of criminal activity. The statistics of the Ministry of Internal Affairs of Russia are used as a database, taking into account the latency of drug crime in the country. The results of the assessment show that in 2022 drugs of illegal origin in the amount of 137.9 billion rubles to 491.7 billion rubles were not seized in Russia, in 2023 – 272.9-354.3 billion rubles, of which 96.5-344.2 billion rubles were laundered in 2022, in 2023 – 191.0-248.0 billion rubles, 86.9-309.8 billion rubles were withdrawn abroad in 2022, 171.9–223.2 billion rubles in 2023. Comparison of the calculated indicators with estimates of suspicious transactions for the withdrawal of funds abroad published by the Central Bank of the Russian Federation is not advisable, since laundered drug proceeds are not sensitive to anti-laundering tools. We assume that the author’s observations concerning the persistent seasonality of drug crime in Russia will help in the further adjustment of antilaundering measures. The revealed seasonality is not explained in terms of economic theories of supply and demand. Presumably, the real reasons for seasonality are related to the logistics of transnational criminal groups that ensure the traffic of illegal substances to Russia. This can be confirmed by the concentration of drug crime in the country identified during the study, which is accompanied by an increase in risks in the drug market.

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