- US customs officials seized a container ship financed by JPMorgan this week, after authorities found nearly 18 tons of cocaine with an estimated street value of $US1.3 billion in the vessel.
- The drug bust on the Liberian-flagged MSC Gayane is surprising for several reasons.
- The sheer quantity of cocaine it was carrying, its links to JPMorgan, its presence in the US, and the recent string of West African drug busts are worth noting.
A container ship financed by JPMorgan was seized by US customs officials this week, after authorities found nearly 18 tons of cocaine with an estimated street value of $US1.3 billion on the vessel. The drug bust on the MSC Gayane is surprising for several reasons, which we outline below.
The sheer quantity of cocaine
The roughly 39,500 pounds or 17.9 metric tons of cocaine found onboard the MSC Gayane outweighed the total amount of cocaine that passed through West Africa in 2013, and all of the cocaine seized across Africa between 2013 and 2016, according to the United Nations Office on Drugs and Crime.
The vast quantity might reflect a supply glut. Global cocaine manufacturing surged by a quarter in 2016 to 1,410 tons, according to the World Drug Report 2018. The production boom is centered in Colombia, where cultivation of the coca plant rose 17% to 171,000 hectares in 2017, according to the UNODC.
The link to JPMorgan
The link between the MSC Gayane and JPMorgan might be the most surprising aspect of the drug bust.
The MSC Gayane is operated by the Switzerland-based Mediterranean Shipping Co., but JPMorgan helped finance MSC’s purchase of the boat. The pair reportedly structured the purchase so that the boat was owned by client assets in a transportation strategy fund run for JPMorgan’s asset management arm.
JPMorgan hasn’t yet publicly addressed its association with the vessel, and has declined to comment to Markets Insider.
The LIberian connection
The MSC Gayane sailed under the flag of Liberia, a West African country. West Africa is a popular transit route for smugglers between South America and Europe due to its porous borders, weak rule of law, largely unmonitored coastline, and limited infrastructure and resources. The proportion of cocaine seizures in Africa accounted for by West Africa rose to 78% in 2016, “reflecting the rapidly growing importance of West Africa as a transit area,” the UNODC said.
However, there appears to be little drug smuggling between West Africa and the US, making the MSC Gayane drug bust highly unusual. Higher street prices and a lower risk of getting caught make Europe a more lucrative and attractive market than the US, Nigerian drug smuggler Chigbo Umeh told The Guardian in 2015.
The ties to West Africa’s drug-smuggling boom
The drug bust on a Liberian-flagged vessel is the latest in a string of major seizures linked to West African countries this year.
In May 2018, Algerian officials seized more than 1,500 pounds of cocaine on a Liberian-registered containership that was transporting frozen meat from Brazil, according to the BBC. In February of this year, Cape Verde officials found 21,000 pounds of cocaine, with a street value north of $US700 million, on a Panama-flagged vessel. A month later, authorities in Guinea-Bissau notched their biggest-ever cocaine bust – and the country’s first in a decade – when they found almost 800 kilograms or more than 1,700 pounds of the drug hidden in a false bottom of a truck loaded with fish.
“There were doubts whether West Africa was still being used as a major transit route, but these seizures seem to suggest that there is a return,” said Mark Shaw, director of the Global Initiative against Transnational Organised Crime, in an interview with Bloomberg. “It’s a surprise and it’s very significant.”