Multinational and multisectoral cooperation is needed to tackle the risk of misappropriation of  COVID-19 funds, preventing the opportunities for organised crime to establish more control over legal, capital, and financial markets.

The COVID-19 pandemic-induced economic recession has pushed an estimated 85–115 million people globally into extreme poverty and unemployment, which is expected to rise to 150 million in 2021 — the first rise in global extreme poverty cases in 20 years. A cross-national study by the United Nations Global Pulse Initiative draws a correlation between the changes in these economic indicators with associated changes in recorded crime. In contemporary societies, poor financial conditions are one of the leading causes of stress-induced crimes. Higher levels of unemployment are often accompanied by poor working conditions, decreased social spending by governments, and increased prices of consumer goods — as has also been witnessed in India in the past few months.

The UN Sustainable Development Goal 16 (SDG 16) includes commitments towards peace, justice and strong institutions as effective, transparent, and accountable institution are essential for sustainable development in the long run. However, the pandemic has brought many governments around the world under strain, which hampers their service delivery capabilities. There has been an alarming rise in domestic violence, labour disputes, social security benefits and insolvency. The limited operativity of justice systems, because of the  lockdown measures, has further exacerbated the situation. Although the justice system is coping with the pandemic, rule of law and human rights are key to achieving the transformational change. The response to COVID-19 should be framed through the SDG 16 lens, as it is the key towards ensuring an effective, inclusive, and a just public health response, while keeping the world on track towards achieving the SDGs by 2030.

Individual crimes

A study conducted on the effects of unemployment on criminal motivation and opportunities between 1978–2005 in 400 of the largest counties in the United States, showed a consistent relation between unemployment rates and property crimes of burglary, larceny, and motor vehicle theft. Similarly in India, the lack of jobs has pushed many people into criminal activities as unemployment rates have grown exponentially from 7 percent before the lockdown to a peak of 27.11 percent in April last year. Overall, labour force participation has also decreased from 43 percent in January 2020 to 40 percent in November indicating that people have been staying out of the job market; a problem compounded by the unemployment crisis.

A study on criminal activity analysing incidence of FIR reporting in Bihar, the state with the lowest population to police ratio in the country, compares crime rates in the COVID-19 pre-lockdown, lockdown, and post-lockdown periods. The results show that as the lockdown transitioned to a phased system with certain areas being classified as high restriction red zones and others as low restriction orange and green zones — there was a higher incidence of economically motivated crimes in the red zones attributed to the higher number of job losses and business closures.

Apart from the financial strain, the social containment of people due to the shelter-at-place orders brought about by the global health crisis also influences the observed criminal misconduct of people. With more time being spent at home during the COVID-19 pandemic, there is a greater scope for crimes like domestic violence and child abuse. The pandemic has also aggravated violence against other vulnerable societal sections such as the LGBTQ people, the elderly, and those in deep poverty. In India, Google search trends for “Domestic abuse” and “Domestic violence helpline” were peaking during the initial 68-day lockdown period in which there has been an increase of 100 percent in the calls for help and request for relief shelters in domestic violence cases during the last week of April from the first week of March, as reported in the 2020 UN Human Development Report. The number of reported domestic violence cases in India, which only account for 14.3 percent of the total cases, is also at a 10-year high.

Organised crime

The very nature of organised crime is highly adaptable, which it has demonstrated with its ability to extract long-term gains from crises such as the end of the Cold War or the global economic crisis of 2009. The Financial Action Task Force (FATF), an intergovernmental organisation committed to combating money laundering and terror financing, has recently issued warnings about an expected rise in anti-money laundering crimes due to risks associated with remote work and online sales. India’s National Security Advisor had said that, “financial frauds have seen exponential increase due to greater dependence on digital payment platforms.”

The FATF have also predicted an increase in cybercrimes. These include ransomware by enticing anxious victims to click on links promising anti-coronavirus remedies and exposing their devices to remote control and hacking. Additionally, criminals have reportedly impersonated government officials or used other phishing techniques to obtain personal or financial information, held fundraising for fake charities helping COVID-19, and enabled fraudulent investments into fake companies promising  a cure for the novel coronavirus. Between February and March 2020, Interpol reported a 788 percent growth in high-risk website registrations globally, whereas a cyber security firm reported a 600 percent increase in phishing mails only in March 2020. It is estimated that cybercrimes will cost the world economy US$ 6 trillion in 2021. Also, the number of cyberattacks that originated in India had more than doubled to 2,299,682 incidents in Q1 2020 as compared to 854,782 in Q4 2019. To tackle the upward trend of cybercrimes, Delhi Police has trained 1,300 additional personnel to manage the increasing cyber threats.

The immense financial strain on legitimate businesses veering towards bankruptcy in various sectors such as tourism, manufacturing, and food presents organised crime syndicates with the opportunity to penetrate the legal economy by gaining direct or indirect control of failing businesses through usurious loans. With more people moving their money out of the financial system due to economic uncertainty, criminal organisations will increasingly utilise this opportunity to propagate cash-dominated unregulated financial markets with credit lines to fund businesses while attempting to capitalise on the plight of the unemployed and vulnerable to expand their base and recruit new members. Although there have been reports of smuggling of illegal foreign tobacco, worth approximately US$ 220,000, using the migrant special trains in India, lockdowns and restrictions have hampered the illegal activities conducted by organised crime groups like the trafficking of drugs, firearms, and humans. Compared to 2019, which saw illegal smuggling of 120 tons of gold into India, the lack of transportation options during the pandemic has limited the illegally smuggled gold in India to two tons a month.

There are examples of organised crime syndicates taking advantage of the shortages in medical supplies by leveraging their existing supply chain of counterfeit products to distribute substandard protective equipment like masks and sanitisers, jeopardising the health of their users in Indian cities. An international operation conducted by Interpol in 2020 led to the seizure of over four million potentially dangerous pharmaceutical products worth US$ 14 million. Additionally, fake COVID-19 vaccines are being sold on the internet in deprived regions of the world, and in March 2021, 2400 doses of a fake vaccine were smuggled into South Africa from China. There has also been an increase in organised property crimes during the pandemic with the use of real estate as a front to layer illicit funds, a method popular in the criminal underground.

Multinational and multisectoral cooperation is needed to tackle the risk of misappropriation of  COVID-19 funds, preventing the opportunities for organised crime to establish more control over legal, capital, and financial markets. A robust mechanism for beneficial ownership registration for all national and cross-border financial transactions and assets to check corruption and money laundering will prevent the infiltration of organised crime in the global economy. A swift and well-targeted stimulus response will also go a long way in preventing and stopping players in the illegal economy, especially during stressed economic situations characterised by Indian economy at the moment.