Rotterdam is one of the largest transshipment points for containers in the world and is also one of the largest drugs transit points for Europe. Crime there is relatively heavy compared to other dutch cities.
Off-topic, but it's hard to get the right feeling about the valuation given in drug busts. They say 100 million, but nobody actually lost that much money or paid that much money, and the drugs will just be replaced. The "wholesale" value of the drugs at that port may well have been 1/1000th of the quoted street price or less.
You get the impression that they like showing off big numbers, but it's difficult to be convinced that it ultimately makes a big difference, or even a positive one.
For example, a kilo of cocaine in Los Angeles is around $17K. It's around double that in many other cities. Call it $25K as an average "street" price in major US cities (higher in those further from major trafficing routes). That gives a value around half of the amount quoted.
To me, it seems like the police break everything up into half-gram prices and then add all those up. This would be like investigating the theft of 1000 gallons of water from a tap and then adding up how much the cost of that water would be if it was all converted to 250ml Evian bottles at retail.
No, the real value is the wholesale value at the port. What someone might pay to be able to pick up that amount at that place, or alternatively the marginal price i.e. what it cost to get the goods to that port.
Is the “real” value of a field of corn ready to harvest the cost of the seed? the market price per bushel? the retail price of the tens of thousands of boxes of corn flakes?
The value of anything accumulates with every action that is done to it and every piece of capital involved. A wholesale good at port is in the middle of that process and has not had all of its end value added yet.
I think this whole conversation is missing the forest for the trees. What matters is that it was worth enough to motivate torture. Quibbling over what number to put to that is missing the point.
I knew this and the first thing i said was “off topic”, but i do think that quoting the street value exaggerates the effects of the bust and the pattern of communication distorting the reality in public announcements is worthy of debate.
And yes, you can distort reality by telling the truth when you choose irrelevant facts for your main message. Lies, damn lies, and statistics.
The whole problem with drugs and law enforcement is that it has been driven now and in the past by emotional manipulation. Much of it was originally done by stoking racist fears, "reefer madness" and all that.
If we were talking with reason instead of emotion, about causes and effects, about mitigating and minimizing negative outcomes, about giving people choices and recovery and ways out and in some cases ways to do things safely... a lot of real actual progress would be made.
But that doesn't make sensational headlines, it's not simple or something that people can turn into a succinct cheer.
Sensational stories start to be the goal of the government's "war", success measured in how much the story can impress the population. DISTORTING REALITY.
The real total value of a hand-full of sand is ~$400, because it can be refined into a 32-core Intel CPU.
That is, if we completely ignore that most of that $400 comes from $400 worth of labour that needs to be put into that sand, to turn it into something people can pay money for.
In that same vein, the drugs aren't (yet) worth $100,000,000, because you still need to put in millions and tens of millions of dollars of labour into them, to turn them into something people can pay money for.
If a cargo ship full of Porsches sunk, I would expect a news story about it to quote the total MSRP value of the cars lost, not the wholesale cost. And certainly not the wholesale trading value of the iron ore that Porsches come from.
Not the same here. The seized drugs are already processed and ready for sale to the public. There is no millions of dollars of labour required to split 2000kg into smaller and smaller packages to end up with 2,000,000 x 1g amounts.
This is closer to entire wafers of chips being seized, which require some work to turn into a commodity for public consumption i.e single CPUs, but that is a lot less work, and less technical too, than creating the wafers in the first place.
Layers and layers and layers of distribution adding huge markups to the next in line, with lots of overhead in idle time, transportation, legal, losses, territory defense, recruiting, etc. etc.
The real value of the labor is what is actually getting paid, and most of that value comes up in distribution.
This was a bust of 2000kg in the Netherlands, so this product was due to be sold in Europe. From there to end user I would estimate 3 to 4 levels of distribution. The first layer is splitting it into approx 10kg amounts, the next into 1kg amounts, then into ounces and the final stage is retail of between 0.5 and 3g.
So yes there is labour and distribution to account for but there are not too many layers of it and actually the main bulk of the work in distribution has been done by the time it is in the Netherlands, at which point, in the Schengen zone, the danger/difficulty with transport over country borders is significantly reduced.
The substance in itself must be extremely cheap to produce. What you're paying is the mark-up at each additional step in the logistics chain; and the mark-up is huge because instead of rewarding labour it's rewarding risk. You can imagine that each intermediary might multiply the price by a factor of 5, and you can imagine how many steps there are between a container full of cocaine and the 1-gram doses sold on the street.
A factor of 5 seems too much. If a kg at retail is £50k, let's say £60k when cut to 80%, this would mean the dealer buying it at approx £12k per kg and that middle layer would be buying it at £2k per kg. The price rises at each level but not by the factor you suggest, it's more likely to be by a factor less than 1 for each level.
These are just differences in degree rather than in kind.
There is labor involved in processing the bulk powder: any cutting the seller wants to perform, partitioning into street sale sizes, and of course the actual sales, which is risky and time consuming.
I think you are probably right that the ratio of labor and other costs favors Intel in this comparison, but I think arguing about the specific analogy here is an unhelpful tangent.
The point is: published prices that ignore all of the costs involved in making the sales is a fiction.
If the authorities wanted to inflate the numbers they could quote the weight of the cut product instead. This is a pointless discussion, the street value is what people can relate to, that's why it is mentioned.
This is actually a great point ... How many readers can relate to wholesale drug prices vs how many know how much a hit of coke - at street prices - costs?
There is this concept of 'added value', that 2000 kg of cocaine is very close to being ready to go, cutting it will only dillute it, not increase the street value, it is simply a compression to make it easier to ship.
Suppose you are importing a shipping container full of canned tomatoes. Due to negligence, it is improperly stacked on the deck of the container ship, and in rough seas it slides off the deck and into the water. Luckily for you, you have insurance, and you submit a claim to your insurer. Does the insurer reimburse what you paid, wholesale, to buy that many cans of tomatoes? Or does the insurer calculate its value by multiplying the number of cans by the average retail sale price of a single can, and then pay you that? Obviously they do they first not the second. And, conversely, if you were uninsured, what loss do you book in your accounting? The first loss, not the second.
I think this example, which has nothing to do with illegal drugs, demonstrates the problem with how law enforcement calculates the value of seized illegal drugs (at least in their media releases).
Suppose you are a reporter writing about an unusual accident where a shipping container full of canned tomatoes fell off a ship. Would you quote the value lost as the loss the farmer sold it for, the price the cannery sold it for, the price the importer sold it for, the price the distributor sold it for, or the price the grocery store sold it for? Every news outlet in the world is going to quote the grocery store price, #1 because it's a bigger number and that sounds more impressive, #2 because it's the only price any of their readers can relate to, #3 because depending on the exact structure of the supply chain every single price except for the grocery store price can fluctuate wildly, #4 because that's the way it's always been and you'll confuse your readers if you do anything different.
Suppose you are a reporter writing about a drug seizure. Would you quote the total street price of the drugs, or --- how could you possibly be that familiar with the supply chain to quote any other price? If the transaction between the party doing transport and the party doing distribution has already taken place, the "real value" of the product has changed dramatically despite the fact that the container with the drugs is still the same thing in the same place. How can you tell what the "real value" is if you, the reporter, don't know whether or not it has been transacted?
Even in the case of a supply chain where intermediate prices are defined in written contracts enforceable by law, it would be silly for a reporter to try to dig into what the "actual price" (finger quotes) of the product is instead of just using the street value.
> And, conversely, if you were uninsured, what loss do you book in your accounting? The first loss, not the second.
That's a tax writeoff. Accountants who book the first loss get fired and replaced by accountants who book the second.
> Suppose you are a reporter writing about an unusual accident where a shipping container full of canned tomatoes fell off a ship. Would you quote the value lost as
You'd look for an answer in a press release. If there is no press release, you'd ask the question at a press conference or interview, and then you'd cite the figure you were told without caring about how it was actually calculated. You'd likely only question the value if it sounded obviously wrong.
> Suppose you are a reporter writing about a drug seizure. Would you quote the total street price of the drugs, or --- how could you possibly be that familiar with the supply chain to quote any other price?
Does your average reporter actually know what the average street price of various illegal drugs currently is? Especially given the price varies from drug to drug, time to time, and place to place. I think usually reporters just quote the street value given in the law enforcement press release or news conference, rather than attempting to work out a figure for themselves.
> That's a tax writeoff. Accountants who book the first loss get fired and replaced by accountants who book the second.
The street value is the only value they could possibly quote with some accuracy, it is not as though Cocaine is a listed wholesale commodity. But I think if you discount by 50% or so you'll be pretty close which is still an immense amount of money for a single shipment. 14.5 Million TEU / year. How big a fraction of those are drug decoys?
> But I think if you discount by 50% or so you'll be pretty close
Look, a metric ton of sugar wholesale costs about $250. When you buy it in 1kg bags in supermarkets, with an extremely streamlined and risk free distribution chain, it already costs about four times that price. Imagine how much would the markup be if it were sold by the gram (typical purchase a few grams), by random people on the streets, with a huge personal risk and maybe even cut with other substances to add mass, after having passed through three or four intermediaries. The retail price is probably x1000 the price of the shipping container.
There is a bit of a difference between a KG of sugar which is sold 'as is' vs a kilogram of pure Cocaine which will never reach the end user in that state. So on a KG of sugar those costs are a large fraction, on a KG of coke they are a very small fraction. The markup is so large because the market is happy to bear it and the risk of getting caught goes up as more people are involved which will typically happen near the edge. Drug lords are rarely captured, their minions more frequently and street dealers more frequently still. The street price reflects that and simple economics: competition in drugs sales is fierce, fierce enough to kill for. If they could sell it for more they definitely would. Ironically, the better the authorities get at seizing shipments the higher the street price will be compensating the drug syndicates to some extent for their seized cargo.
> The retail price is probably x1000 the price of the shipping container.
Just because there are huge profit margins doesn't mean that there aren't people who were relying on pocketing the street value, or something similar. Whoever can move such vast quantities of drugs obviously employs hundreds of people who expect to get paid.
These "valuations" are important because they put a number on the whole "chain of value". Of course nobody would paid 100 million for that shipment, just like they didn't paid 80 million for the drugs.
But you sure can bet if those drugs were bought and consumed, around 100 million would change hands ( total ), 10 million more 10 million less.. it's an estimation.
The bust doesn't change the demand at the market. The producers will provide as much as the market demands, taking into account the expected losses along the supply chain (losses such as confiscation).
This only increases the cost of the suppliers. Which will be passed on to the consumer.
As others have said, the war on drugs can only increase the price, and temporarily disrupt supply. I think it has been conclusively proven they are not capable of increasing the price above what the customer is willing to pay.
If they catch 5% of the market cocaine, then those 100 million would not have changed hands because if they didn’t catch those 100million worth of cocaine that cocaine overhead would never have been shipped.
It’s not like people would suddenly start consuming more cocaine if police would stop seizing it.
They would, just like they'll consume less if prices go way up. It's a relatively common occurrence these "shortages", but all of this to a point, people wouldn't consume triple the amount if there was 3x cocaine available.
No one wants the streets to be flooded with cocaine, and I mean - no one - There's a reason why cartels are called cartels.
Well, it's street value so that's retail, though obviously if you are the owner of 2000 kg of cocaine you won't expect to make that much on it. Regardless, the amount here and it's value is so large that you can bet people would be more than happy to kill for it, it is no coincidence that this torture setup was discovered near Rotterdam. Even if the 'markup' is a factor of two. And that particular bust only stands out because of its immense size, 1200 and 1500 kg busts are relatively commonplace.
I think that if I were the head of a police department I would want to educate (or indoctrinate, depending on your view) citizens on the amount of money that drug cartels evade from taxation
I had heard that there are parts of Rotterdam where the politie patrol in groups of five. At the time, I'd thought of their safety, and guessed those must be hard neighbourhoods indeed. But after reading
I wonder if another aspect may be because there are so many drugs transiting through, and while it's relatively easy for two people to be crooked together, it gets fairly difficult for five.
the royal marechaussee aren't border patrol. They fall under the military and only get involved in serious crime. Your average smuggler would get handled by the police.
Interesting that so many fellow Dutch people being surprised "that kind of stuff can happen over here". They seem to forget we're the main worldwide exporter of XTC and a huge distributor for other drugs.
I should have made it more clear I indeed mean the association with the violent crime.
the sentiment I've heard a lot is people see the drugs as a business and the violent, ruthless sides of it are something that mostly happens in Latin America like you see on "Narcos".
Interesting. Nobody I know is surprised by this stuff. Maybe it's because we're in the Randstad area and aware of the strings of liquidations that have been happening in Amsterdam? Not to mention the recent high-profile arrest of Taghi who grew up near Utrecht.
All fallout from the war on drugs. I wish lawmakers would see that prohibition does nothing to curb drug production and use. It just pushes everything underground where a vast market is controlled by ruthless gangs who think nothing of torture and murder. We should accept that a) humans have used drugs for millennia and hoping this will just stop is hopelessly naive, b) invest in actually helping people who’re struggling with addiction instead of criminalising them. Also, as a bonus, c) explore medical uses for substances currently banned.
More and more Latin American criminals directly involved here as well. If anybody is still surprised about this they haven't been paying much attention the last decade or two.
Sounds like some kind of malware was distributed to the phones via compromised EncroChat servers.
I wouldn't want to be one of the EncroChat employees/distributors right now. Their client base seems pretty dangerous, and probably pretty pissed off right now.
Show me the torture chambers today in coffee and sugar. Just 1.
> Avocados [...] has better margins than drugs...
They don’t. If you steal/extort $anything though, the margins get really good. If you switch from drugs to extortion, it’s because you got cut out of the cartel or law enforcement got too distracted by drugs making other crime more attractive.
Criminalization of coffee or sugar would only worsen the poor treatment of labourers in their cultivation areas. The crop might change though.
Brazil’s definition of slavery is much broader than the one you’re thinking of.
> In Brazil, slavery is defined as forced labor but also covers debt bondage, degrading work conditions, long hours that pose a risk to health, and any work that violates human dignity.
"Generally" could mean what you mentioned, or it could mean straight slavery - as the article said there is not good stats. Forced labor is prevalent in many industries, using the US definition of slavery: https://www.dol.gov/sites/dolgov/files/ILAB/ListofGoods.pdf Your original claim was that decriminalizing drugs would prevent this sort of behavior. I think the linked report shows that is not necessarily true.
Bananas aren't a laborious crop. If labourers' salaries were dramatically improved, there'd be minimal retail price impact. The root cause is they grow and ship well from places with crap worker rights/alternative employment.
We have vicious gangs here that control the drug trade but they are happy to take potshots at each other and when there is a serious disagreement they take out each others leadership.
But this kind of brutal violence like a torture chamber and the stuff that you see in Mexican drug cartels (ISIS type of debauched executions) is on way another level.
It is actually bad for their business you would think.
A French friend of mine, long ago in college, was actually on Interpol's list of wanted criminals for a while. He slipped into the US, (have no idea how), and has lived a crime free life here ever since.
One thing he told me after living here in the US for a while was that Americans tend to believe violent crime in Europe is lower than violent crime in the US because they can easily compare the homicide rates. Whereas people like him know that you don't compare murder for murder, you compare murders in the US, to "missing" people in Europe. His sense was that there was actually far more violent crime in Europe at the time, just far fewer living witnesses.
The discovery of this "shipping container" kind of "jibes" with that long ago street-level assessment.
Nice theory. The big differentiator for homicides is simply the number of firearms floating around in the United States. That's an enabler if there ever was one and violent crime is to some extent a natural outflow of that.
When the former USSR collapsed and the war in former Yugoslavia happened cheap arms flooded the market here and that caused an immediate rise in gun related crime. The fact that in the EU countries that neighbor each other can have very different gun laws is another reason why since the Schengen area opened up in some countries there are now substantially more guns than before. They are still illegal, but criminals don't actually care since they are already on the other side of the line and their competition has them too.
There have been shootouts between gangs with fully automatic weapons on the streets of Amsterdam (fortunately not many), and the police has also come under fire from gangs with machine guns during getaway attempts or murder attempts.
I am not sure if they will be able to put this genie back into the bottle. The gangs here are a lot harder this decade than they were 20 or 30 years ago, there are more of them and they are far more ruthless. Some samples: heads left in front of businesses to warn others about territory violations, murders of people who looked alike some criminal or drove the same car in broad daylight, parents slaughtered in front of their kids or in the schoolyard. It's not what it used to be, that's for sure.
A mix of both. Ex Yugo army set up shop in and around Amsterdam bringing manpower and weapons and collaborated with existing dutch crime rings who supplied money and local expertise. This is all fairly well documented now.
Nice theory. The big differentiator for homicides in the United States is proximity to the drug war.
There are more guns than humans in the United States. You'll find ownership of a gun and likelihood of committing homicide to correlate quite poorly; while ownership of a kilo of cocaine correlates quite strongly.
As you're indicating, in Europe, ownership of a kilo, a gun, and propensity to murder, all track quite closely.
This suggests a different set of policy-level decisions than the myopic focus on the tool of murder would.
The United States isn't close to the drug war it causes the drug war. Guns flow across the border in one direction and drugs flow the other way. Guns already inside the United States are of course going to be used in crime as well, of all kinds, not just in drug related crime.
Ownership of a gun and homicide correlate poorer than having a kilo of coke and homicide but still correlates a lot better than no gun and no coke.
> It is actually bad for their business you would think.
No, this is a way to establish a reputation so that people don't even try to screw you. It's good old terror, not very subtle but effective.
When you deal with 'bad' guys and have no legal recourse for anything it is rational to use violence as a way to make others 'play straight', and being very harsh actually minimises the instances where violence is needed at all.
The EncroChat bust has proven so profitable for police it makes you wonder if it wasn't a setup the entire time.
Some agency creates a service marketed specifically for criminals, waits a bit for users to sign up and start using it, then "oops we had a design flaw" and all of the criminals who bought the service are scooped up in the aftermath.
I wonder this about VPN providers. I mean, spinning up the infrastructure could be made push-button, all you need to do is slap a website together and give it an ad budget. If I was a state security service, I'd be running at least a dozen of them - probably at a loss so I can hit an attractive price point. Multiply that dozen by the number of state security services that exist...
Sure... well, let's just say that if and when the founders of Encrochat turn up in small pieces I wouldn't be surprised at all and that could simply have been the one shot they had left at hopefully getting out of this alive. Pissing off a very large number of people that have zero problems with killing your and/or your extended family is a career limiting move if there ever was one. Sleep with the dogs, wake up with fleas. Or not wake up.
Rotterdam ports seem like the sketchiest place in Western Europe. It really comes across as a den of pirates but with modern buildings and.
So many traders with phantom product and other bullshit, a huge useless blacklist of LLCs that people can just spin up anywhere in the world at any time.
And a torture chamber in the port because the "encrypted chat" everyone was using was not encrypted anymore?
Interesting video at the bottom: the Android devices that boot like normal devices, then you can reboot into a shady mode; and in shady mode, when the phone is locked and you unlock with "special" PIN, the phone goes into destroy-all-data mode.
Honestly, if the police are going to out themselves as having cracked the encryption of a major crime tool (thus making it worthless in the future), stopping the usage of custom-built torture chambers is a pretty good reason to do it.
It was blown, if not for that they would have been happy to continue the operation. Once the criminals figured out they had been compromised the operation was effectively over, Encrochat alerted their users to destroy the devices. After that it is obvious there would be a mop-up operation.
So why wouldn't a chamber like this just be delivered, and then watched? It feels like the dutch cops arrested somebody for the crime of transporting a torture chamber, and the people who were actually planning to use it get off without a hitch.
Torture chambers are nothing new, unfortunately. While still completely disturbing, if anything I’d say this setup was relatively mild compared to what you might’ve seen in medieval times or the Inquisition.
The instruments involved may look mild because they're common household items, but I don't think it's safe to conclude there's therefore a discrepancy in the experience. If you're being skinned alive with a common kitchen knife, you're still being skinned alive.
I know that's a rhetorical question, but I would personally choose being ripped apart by horses than spirited away to a torture chamber and tortured to death.
But keep asking yourself the similar rhetorical questions until you land on something that's hard to choose between.
The methods of torture devices centuries and millennia ago are just as horrifying as what you see here. Crucifixion for starters. Brazen bull. Breaking on the wheel. Etc.
No, this isn't new. What is new is that this is more rare than it used to be. (At least, I think/hope it is. I might be wrong). We just need to continue on that path.
Normal mix of media and police increasing the busts importance.
I would guess the 'sound proofing' is to hide drugs.
The scapel and shears were for gardening.
And the dentist chair, both a scary real life tool and common movie prop was about just that, being scary. Or they were bored and had a dentists chair.
This quote isn't even tied to this gangs bust, but they included it just to mislead you.
"Threats detailed on the site included acid attacks and chopping off limbs"
Half thought the same. Why would a criminal gang need a torture chamber in a container? Isn't any basement (and old chair) good for that? And why multiple ones, how many people do they need to torture exactly at the same time? Is there a booking system in place like for meeting rooms?
One possibility is that they're props, good to give a good scare to those who might think of scamming the criminals.
https://www.erasmusmagazine.nl/en/2019/11/14/why-there-are-r...
The largest bust this year iirc is 2000 KG in a single container from Latin America, street value well over 100 million, decoy was a load of bananas.