Category Archives: Analysts’ Publications

Protect yourself and your company against the new GOZeuS and CryptoLocker malware threat

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The National Crime Agency (NCA) and the Federal Bureau of Investigation (FBI) have both issued statements this week warning PC users with Windows operating systems of two new malware threats: GameOver ZeuS (GOZeuS) and CryptoLocker.

Find out more about this malware threat and how you can protect yourself and your business against it here.


 Article by Frances Nobes, follow her @FrancesNobes

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Ukraine: Elections after the “Maidan revolution”

 

Maidan revolution. Ukraine.

Ukraine will hold a countrywide presidential election on 25 May, followed by a second round of voting on 15 June should no candidate achieve an outright majority. The election will not only proceed amid major political upheaval in the country, precipitated by the 22 February 2014 ousting of President Viktor Yanukovych, but also comes amid increasing insecurity in eastern Ukraine where armed groups continue to defy the country’s interim leadership and menace its armed forces.

For a free, detailed security analysis of the outlook for Urkaine following the upcoming elections, please click here.


Analysis by Louw Nel, follow him @Euraspect

 

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The growing threat of kidnapping in Mexico – Part 2

Mex soldierIs there a link between the war on drugs and kidnapping in Mexico?

As noted in part one of this blog series, 2013 marked the biggest year-on-year increase in the number of kidnapping cases reported per month since 2008. There are numerous theories that attempt to explain this apparent rise in kidnappings in the country and determine whether this trend will continue or even be further accelerated in years to come. A number of these theories examine the link between ongoing ‘war on drugs’ in Mexico, including the arrests of high-value targets (HVTs), such as top cartel leaders, and increases in violence and other forms of crime, such as kidnapping. Part two of this series provides a brief overview of these theories.

The war on drugs in Mexico

In 2006, Mexico’s former president, Felipe Calderon, launched an extensive anti-narcotics strategy in an effort to combat drug trafficking in the country. Under incumbent president Enrique Pena Nieto, the so called ‘war on drugs’ is continuing with his anti-crime strategy. Although Nieto declared that his strategy would be more holistic and focus on addressing the socio-economic roots of violent crime, to date there hasn’t actually been as much of a change in strategy as was proclaimed or even anticipated. The recent arrests of high-ranking transnational criminal organisation (TCO) figures, such as the 22 February arrest of Sinaloa cartel’s highest-ranking member, Joaquin Guzman (also known as El Chapo), illustrate that Nieto has not entirely abandoned the ‘kingpin strategy’ that was utilised by his predecessor.

Government focus on kidnapping

The fight against kidnapping in Mexico also forms a central part of the war on drugs and Nieto’s holistic anti-crime strategy. Nieto has promised to halve kidnappings during his term in office; however, evidence of this has not yet been seen. The government sees the threat of kidnapping as a serious concern. In January 2014, Nieto’s government re-pledged themselves to the fight against kidnapping with the launch of the National Anti-Kidnapping Strategy (Estrategia Nacional Antisecuestros). This strategy includes a ten-step action plan focusing on technological and legal improvements, the creation of additional anti-kidnapping units, and a focus on the ten states most impacted by the crime; these include Durango, Mexico, Guerrero, Michoacan, Morelos, Tabasco, Oaxaca, Veracruz, Tamaulipas and Zacatecas. According to government sources, as many as 74 percent of kidnappings occur in these states; however, it should also be noted that it is estimated that only one in ten cases of kidnapping is ever reported and all kidnapping statistics could therefore be misrepresentative of the actual threat.

To what extent the new National Anti-Kidnapping Strategy will come to fruition is still to be seen. Many have criticised the plan for being too broad and lacking specifics on exactly what is to be done to reduce the kidnapping threat in the country. However, the fact that the government has acknowledged the extent of this threat in Mexico is a positive sign as more resources will be made available to traditionally under sourced anti-kidnapping units. In recent months, increased concerns over the anti-kidnapping strategy have been raised; these include the continued use of the kingpin strategy and the effect that the ongoing war on drugs has on kidnapping in the county. The two most prominent concerns are examined below.

Diversification of cartel tactics

TCOs such as Mexico’s major drug cartels have been increasingly diversifying their operations beyond traditional drug trafficking in recent years. Cartels are expanding into new segments of the ‘criminal industry’ and also investing in business outside of the scope of its existing operations. Beyond drug trafficking, criminal groups are branching out into prostitution, piracy, human trafficking, human organ harvesting, illegal mining and logging, merchandise, oil and mineral theft, kidnapping for ransom and extortion, and various other illicit activities.

Traditionally in business, there are two dimensions of rationale for diversification in any industry; these are defensive or offensive strategies. In the case of organised crime in Mexico, it has been argued that the ongoing war on drugs has forced cartels to adopt a more defensive strategy in order to spread the risk as their traditional (drug trafficking) markets are contracting. According to this argument, the police and army crackdown on drug traffickers in recent years, including the arrest of major cartel leaders, has inadvertently forced cartels to peruse other avenues of revenue.

Although proving a direct link between the diversification of cartel operations and the war on drugs can be tenuous, this theory has received credence with various scholars and members of the Mexican government. According to this theory, the countrywide increase in kidnappings can in part be linked to this diversification.

Splintering of cartels and the rise of ‘super-powered’ street gangs

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Another related trend contributing to escalating violence and the rise in kidnappings in the country is the fracturing of cartel networks. Since the 1980s, Mexican cartels have begun to fracture into smaller, geographically compact regional networks. This process of splintering (also referred to as ‘balkanisation’) has affected the operations of major cartels. There are various drivers for this balkanisation, including inter- and intra-cartel violence, external pressure from governments (including the arrest of cartel leaders), changes in drug production operations and the evolving global drug industry.

This balkanisation can in turn lead to the rise of what has been called super-powered street gangs. These smaller localised gangs could replace (or at least supplement) cartels as the major drivers of violence in Mexico in years to come. Hyper-local groups are able focus all their attention on a small area of operation and potentially control these areas more effectively than large cartels. They utilise an assortment of tools from social media, to contacts in government, the local community and police to spread fear and maintain control.

Tactics of these smaller street gangs often differ from that of the large cartels. Although most of these gangs are also involved to some degree in the drug industry, other forms of crime, such as kidnapping, and specifically express kidnapping, is often more lucrative for these smaller gangs. The rise of these groups can therefore be seen as a contributing factor in the ongoing increase in kidnapping.

Historically, the kingpin strategy has also been blamed as a contributing factor for the apparent splintering and decentralisation of violence. The most common critique of the strategy states that the killing or arrest of an organisation’s leader creates a void. This void in turn can lead to the internal fracturing of a cartel and allows rival groups (internally or externally) to challenge the cartel; this often results in violent conflict. Also, as mentioned above, this could provide opportunities for smaller groups to gain a foothold in the industry. Larger gangs can also split, as happened with the Gulf Cartel. This cartel was dominant in large parts of north eastern Mexico until 2010, when a split within the organisation saw its armed wing, Los Zetas, form its own cartel and subsequently supplant the Gulf Cartel as the foremost organised crime group in the north east. In turn, extensive infighting within Los Zetas occurred between 2010 and 2012 and lead to fracturing within the group. It should be noted that today this group is believed to generate about 50 percent of its revenue through traditional drug trafficking; the rest of the revnue comes from low-level criminal activities such as extortion, kidnapping, theft, piracy and other licit and illicit activities. It can be argued that this business model has been pursued due to fractioning within the group and also as a diversification strategy.

Findings and Forecast

It is important to note that although the above-mentioned theories have received strong support, proving a direct link between the war on drugs, including the arrest of cartel leaders and a change in kidnapping rates, is tenuous. Theories surrounding the diversification of cartel operations and the potential splintering of large cartels can be seen as contributing factors to the increase in crimes such as kidnapping; however, with the limited information available, the link is speculative at best. The problem lies in the dictum; correlation does not necessarily imply causation. There might be unknown lurking variables that play a crucial part in explaining and forecasting kidnapping trends in Mexico. The theories above should therefore be seen as guidelines towards the truth, but not as empirical proof in and of themselves.

However, with the information available, one can make a number of well-supported forecasts for kidnapping in Mexico. Firstly, it should be noted that the increasing focus of the government on kidnapping, and the launch of the Anti-Kidnapping Strategy, will eventually bolster anti-kidnapping units at a state level. It could also lead to a decrease in kidnappings in the long-term. However, this plan is still vague and will take time to implement. As such, the potential benefit from this plan is not expected to be seen in the coming months.

The government is also expected to continue its traditional approach to the war on drugs and use of the kingpin strategy in coming months. Most of the major heads of cartels have been arrested, but as new leadership arises, this strategy will continue. This in turn could continue to lead to increases in kidnappings countrywide, according to the theories posited above.

As noted in the introduction, Mexico already has an increasing trend in kidnapping. This trend is partially driven by the above-mentioned theories. As new kidnapping statistics are released, it will become evident to what extent these factors have impacted kidnapping trends. At present, it is anticipated that 2014 will remain consistent with previous years and see a continuation of the trend of increasing year-on-year countrywide kidnappings; there will likely be more abductions in Mexico in 2014 than in 2013. In terms of geographical area, kidnapping rates will remain high in states that have traditionally been badly affected by the crime and increase elsewhere. It is anticipated that there will not be any meaningful decrease in abductions in any particular state.

More free stuff, listen to our Mexico: Kidnapping Overview – January 2014 on SoundCloud


Part three of this series will focus  in more detail on violence and kidnapping in Mexico on a municipal level.

Article by Barend Lutz, follow him @LutzBarend

If you have thoughts and views on why kidnapping in Mexico is increasing, or have any questions about this article, please leave a comment below.

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The growing threat of kidnapping in Mexico – Part 1

Mex Kidnapping

This is part one of a three part series; part two can be found here.

During 2013, which was President Enrique Pena Nieto’s first year in power, Mexico witnessed a significant increase in the number of kidnapping cases. In 2012, the country recorded 1,407 kidnappings; by the end of 2013, this figure had increased by as much as 20 percent to 1,695 kidnappings, marking the biggest year-on-year increase since 2008.

The records used to arrive at these numbers are from the Mexican government and are not beyond reproach. Those with some conception of the security situation in the country will agree that most kidnappings are not reported by victims. In addition to this, there is a disincentive by local authorities to account for those cases that are reported. The extent of this total non-reporting rate is assessed to be between 1 and 10 percent; there were, therefore, likely somewhere in the region of 30,000 kidnappings in Mexico in 2013.

Despite the shortfalls in using government statistics, they are an effective means of establishing changes in kidnapping characteristics in Mexico. This is of importance in assessing trends, which are arguably more valuable to those with interests in the country than accurate absolute figures. The main trend that was seen in 2013, besides an increase in absolute numbers that is accepted to be at least 20 percent, was the consolidation of the risk in areas that have traditionally been significantly affected. These mainly include those border states that perennially exhibit high homicide rates, which in turn stem from elevated levels of organised crime violence. At the same time, central states exhibited significant increases in kidnappings in 2013, which accounts for why Guerrero, Tamaulipas, Michoacán, Mexico state, Morelos, Veracruz, Tabasco and Jalisco were ranked the top in terms of kidnapping numbers in 2013.

Trends identified during the course of 2013 suggest that the year ahead will not be characterised by a significant decrease in total kidnapping numbers in Mexico. This conclusion is supportive by the continued failure of the Mexican authorities to address the complicated root causes of the crime.

More free stuff, listen to our Mexico: Kidnapping Overview – January 2014 on SoundCloud


Part two of this article will focus  in more detail on various theories to explain this apparent rise in kidnappings in the country and determine whether this trend will continue or even be further accelerated in years to come?

Article by Nick Piper, follow him @AmericasRisk

If you have thoughts and views on why kidnapping in Mexico is increasing, or have any questions about this article, please leave a comment below.

This article was originally posted in the KR Magazine 2014 Forecast, for additional Kidnap and Ransom articles, including by other red24 analysts, subscribe here.

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Afghanistan: Elections and the ongoing security challenges

Operation Mountain Fire

On 5 April, presidential and provincial council elections will be held across Afghanistan.  Chief Asia Analyst, Jonathan Vincent, analyses the ongoing security challenges in the country and forecasts how these could impact the elections.

For the full free analysis, click here

Analysis by Jonathan Vincent, follow him @South_Asia_Risk

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Venezuela: The link between politically motivated protests and regime instability

JORNADA DE PROTESTA DE LA OPOSICIÓN EN CARACAS

In light of near-daily anti-government protests and violent unrest in Venezuela since 12 February, Chief Americas Analyst, Nick Piper,  analyses the possible short-term and long-term political outcomes in Venezuela.

For the full free analysis, click here

Analysis by Nick Piper, follow him @AmericasRisk

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The taming of the vigilantes

Will the legalisation of civil defense groups improve security in Mexico?

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On 27 January, Mexican authorities announced that the government would begin drafting policy to legalise civil defense groups and have them integrated into the Rural Defense Corps. These vigilante groups formed in response to the widely perceived failure of the Mexican government to combat drug cartel violence in the country. Such groups have proliferated in recent years; it is estimated that there are over 20,000 people across the country aligned therewith. Civil defense groups have fulfilled a policing function in areas that have been significantly affected by cartel activities, and have a strong operational presence in the western states of Michoacan and Guerrero.

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The government has stated that the military and federal police will now work with these groups to combat drug cartels and curb narcotics trafficking in the country. Vigilante leaders will have to submit a list of their members to the Defense Department for the army’s approval; furthermore, the army will reportedly oversee the groups. In exchange, vigilante groups will be supplied with the communications, equipment and logistics necessary to conduct security operations. Government representatives have stressed that the partnership is an interim measure, suggesting that civil defense groups will be expected to lay down their arms and disband once the security situation has improved.

This development in Mexico’s approach to security raises two primary questions. Firstly, how dramatic is this policy shift? Secondly, will the legalisation and government regulation of civil defense forces lead to an improved security environment in the country?

Dramatic shift in policy?

The government’s proposal of collaboration with civil defense groups does not mark a significantly new approach to civil defense groups.

Civil defense groups and civilian groups have driven out members of the Knights Templar drug cartel in a number of rural towns in Michoacan in recent months. In doing so, vigilantes clashed with police as well. In addition, federal police have been barred from entering a number of towns, due to persistent hostilities in Guerrero. While this demonstrates that the relationship between vigilante groups and police is a far cry from a buddy cop film, it is not completely fraught. There has been tacit support of civil defense groups from security forces, particularly in Michoacan. There are reports of police welcoming assistance from civil defense groups during armed clashes with cartels. The move to temporarily legalise vigilante groups suggests that the government concedes that its security forces do not have the capacity, will or public support to contain drug-related violence in the country.

A safer Mexico?

It is important to note that one of the main reasons vigilante groups have made considerable headway in combating cartels in rural Mexico is that they are not compelled to follow due process, respect human rights, or abide by the same code of conduct as government security forces. Federal police have greater accountability, and as such, have more limited means available to them to fight cartels (who typically use dirty tactics to achieve their desired ends). Civil defense groups appear to have filled that gap, so to speak. If these vigilante groups do adhere to government regulation, the extrajudicial tactics available to them will be restricted, and thus the efficacy of these groups in combating drug cartels may be eroded.

In addition, there have been increasing reports that a number of vigilante groups in western Mexico are proxies for rival cartels and criminal organisations. If these groups are corrupt, their involvement in official police operations could severely undermine the security environment in Mexico.

The government has stated that civil defense groups will be subject to some form of formal training by the Defense Department. However, Mexico’s federal police and military have themselves been subject to accusations of human rights abuse, as well as of disrespecting the rule of law and due process. Moreover, critics have claimed that rudimentary police training will not provide vigilante groups with esprit de corps.

Critics have warned that past experiments of this nature in other Latin American countries have failed dismally. In Colombia, pro-government paramilitary patrols were responsible for a number of serious human rights violations and openly engaged in illicit activities in the 1990s, when armed groups such as the AUC were legally and logistically backed by the government. Indeed, since paramilitary groups were demobilised between 2003 and 2006, a number of former paramilitary forces have become members of transnational criminal organisations in the country, also known as bandas criminals, or BACRIMs.

In light of these concerns, it is possible that the legalisation of civilian defense groups may have long-term effects on the security environment in Mexico. The government and vigilante groups are still in the process of formulating the policy for legalisation and cooperation. Whether the outcome of this venture is positive for Mexico’s security environment will largely depend on the terms and conditions thereof.

To limit potential fallout from unclear mandates and procedures, the following issues should be addressed in the final draft of the policy:

  • A specific timeframe should be provided for the legalisation period; moreover, contingencies for once the groups are expected to disband should be clearly laid out.
  • Strict vetting procedures should be implemented for civil defense group members involved in official operations.
  • Clear delineation of civil defense group roles and procedures.
  • Hierarchies for personnel.
  • Areas of jurisdiction.
  • Monitoring and evaluation of civil defense group performance.

Article by Lara Sierra-Rubia – Follow her @AmericaAnalyst

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The EU in 2014: The political hangover of economic recovery

@Elliott_PolRisk‘s article on the future of the EU in 2014 is in our Threat Forecast. Will the far-right’s influence increase in the EU?

Check it our here: https://www.red24.com/nonmembers/threat-forecast.php

Threat forecast 20141

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The red24 Threat Forecast: Political risk analysis for 2014

The red24 2014 Threat Forecast has been released! It is an open access report, so it is free to download. This year, we have created a microsite for the report, but the forecast also available to download in pdf format. To access this report, please click here

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Contents of the forecast:

The forecast includes concise articles and podcasts that address various political issues from different regions.

Europe

  • The EU in 2014 – The political hangover of economic recovery
  • Russia – The calculated gamble of the Winter Olympics in Sochi
  • Turkey – A difficult year ahead

Americas

  • Brazil – Security concerns at the 2014 FIFA World Cup
  • Mexico – Mexico’s national security policy and persistent violence
  • United States – The threat of terrorism from within

Middle East and North Africa

  • Syria – Long-term political and security challenges
  • Iraq – Al-Qaeda in Iraq’s resurgence
  • Egypt – The persistent cycle of political uncertainty and instability

Asia

  • Afghanistan – Repercussions of the NATO withdrawal
  • China – Increasing labour protests in the People’s Republic
  • India – Will the recent creation of new states galvanise other separatist movements?

Africa

  • The Sahel – A new frontier of terrorism?
  • Mozambique – Concerns over a new civil war as RENAMO ‘returns to the bush’
  • Kenya – Was Westgate a sign of things to come?

Plus: Kidnapping and piracy developments, an event calendar and list of 2014 elections.

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Andre Colling on 19 November bombing in Beirut

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Link: Andre Colling on 19 November bombing in Beirut

Brief analysis from our Chief MENA analyst, Andre Colling, on the suicide bombing and car bomb detonated outside of the Iranian embassy in Lebanon’s capital, Beirut, on 19 November.

Follow Andre on Twitter @AndreColling

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