CIF - How drug traffickers exploit modern trade solutions

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

16 March 2026 Key messages • Growing volumes of cocaine, fentanyl, and other drugs are entering the global economy through legitimate trade channels. Criminals are expanding the scope and scale of their operations through FTZs, maritime transport and small package delivery services, taking advantage of the same efficiencies that make modern trade systems effective. The diversification of drug types – synthetics alongside traditional plant-based drugs – coupled with criminals’ adaptability and their integration into wider illicit networ ks, adds complexity to monitoring and enforcement efforts. • Criminals use increasingly sophisticated concealment methods that make illicit substances difficult to detect within legitimate supply chains. Enforcement gaps – such as resource constraints, fragmented co -ordination, and uneven technological capacities – allow traffickers to exploit weaknesses and move shipments across borders. • Drug trafficking is a transnational issue that requires a whole-of-government approach, with co-ordinated efforts amongst countries, international organisations, and the private sector. Combating the flow of narcotics requires harmonised international standards, innovative enforcement technologies and strong partnerships with the private sector. • Governments must understand and address vulnerabilities in modern trade infrastructure, while advancing trade-facilitation reforms that preserve an open, resilient global trading system . What’s the issue? Governments are facing an urgent crisis that threatens public health and safety and the integrity of our international trading system. Drug traffickers are exploiting modern trade channels, including free trade zones (FTZs), small parcels and containerised maritime shipping, to conceal and distribute narcotics across borders. On 23 September 2025, the OECD Working Party on Countering Illicit Trade (WP -CIT) convened enforcement officials and experts from OECD countries to share evidence, emerging trends, and case How drug traffickers exploit modern trade solutions2 

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

studies on narcotics trafficking through trade -based channels. This Policy Brief highlights the key

How drug traffickers exploit modern trade solutions2 

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

studies on narcotics trafficking through trade -based channels. This Policy Brief highlights the key discussions from this meeting, including recent trends and enforcement gaps. The below table summarises the recent trends and challenges across these three legitimate trade channels. Table 1. Abuse of legitimate trade channels in drug trafficking Trade Channel Free Trade Zones (FTZs) Maritime Shipping Small parcels Scale of Shipment Bulk and small-scale shipments; often precursor chemicals Bulk shipments (tonnes) via containerised cargo Small quantities (grammes to kilos) but high frequency Primary Drugs Involved Cocaine, precursor chemicals, synthetic opioids Cocaine (dominant), methamphetamines, some precursors Synthetic opioids (fentanyl, nitazenes), methamphetamines Concealment Tactics Front companies, false documents, regulatory loopholes Tampered seals, container compartments, at-sea transfers Consumer cover loads, misdeclared goods, e-commerce parcels Governance Challenges Opaque ownership, weak oversight, fragmented regulation Low inspection rates, complicit port and supply chain workers Minimal oversight, simplified customs declarations Key Enforcement Challenges Transparency gaps and lack of harmonised rules Volume of trade exceeds inspection capacity Overwhelming parcel volume, anonymity of senders/receivers Free Trade Zones (FTZs) have grown rapidly in recent decades as governments seek to attract business and foreign investment. But while FTZs offer clear advantages – lower tariffs, flexible rules on financing, ownership, labour, immigration, and taxes – their rapid expansion also brings risk. Criminal networks use non-transparent FTZs to register shell companies, facilitate the importation of precursor chemicals,

and foreign investment. But while FTZs offer clear advantages – lower tariffs, flexible rules on financing, ownership, labour, immigration, and taxes – their rapid expansion also brings risk. Criminal networks use non-transparent FTZs to register shell companies, facilitate the importation of precursor chemicals, conceal narcotics in containerised cargo, and launder the profits of drug sales. Where monitoring is weak and regulation fragmented, conditions are ideal for criminals to obscure the origin, destination, and ownership of goods, making enforcement difficult. Maritime transport is a high-volume, low-risk channel for criminals, favoured for the transport of cocaine and other bulk drugs. Criminals conceal narcotics in containers, refrigerated units and even ship structures. At-sea transfers are increasing, and authorities are identifying new concealment methods such as semisubmersibles and GPS -tracked drop -offs (Box 1). With over 80% of goods traded by sea, (UNCTAD, 2025[1]) enforcement faces systemic inspection limits with a low fraction of cargo inspected . Complex shipping routes (trans-shipments and multi-port stops), fragmented oversight (multiple supply-chain stages and actors) and corruption complicate enforcement. Box 1. Tactics for concealing narcotics in maritime transport Criminals use increasingly sophisticated concealment methods, with non-transparent Free Trade Zones (FTZs) in major ports serving as key gateways for narcotic smuggling. Criminals may: • Embed drugs within manufactured goods, for example, within household items – such as ovens –, induction units, vehicle chassis, or the boxes or wooden pallets carrying the goods. • Make technical modifications to containers and tankers, for example by hiding drugs in metal sheet compartments. The structural compartments of refrigerated containers have also been targeted, with drugs concealed in insulation and motor compartments that can be opened and resealed within minutes. • Use “rip-on, rip-off” methods, wherein criminals tamper with container seals to insert narcotics 3

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

into the cargo space after the container has been packed and sealed.

• Use “rip-on, rip-off” methods, wherein criminals tamper with container seals to insert narcotics 3

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

into the cargo space after the container has been packed and sealed. • Rely on at-sea drop-offs, where crew members or accomplices throw waterproof packages (i.e. of cocaine) into the ocean, tracked by GPS and retrieved by small vessels. Fast boats, semisubmersible submarines, and even drones – both aerial and marine – are being adapted for smuggling operations. • Use cloned container identifiers (copying the identity of a legitimate container) to mask illicit cargo or avoid controls. • Make use of GPS trackers (i.e. embedding them within cocaine bricks) to monitor their movements and detect whether consignments are intercepted. The rise of e -commerce and small parcel delivery services has also created an alternative trafficking route, notably for synthetic drugs (Box 2). Criminals move drugs in huge volumes using a “little and often” strategy. Criminals hide narcotics within legitimate consumer products such as dog food, electronic equipment, or personal items or transport them inside or alongside normal commercial consignment s. Criminals take advantage of simplified customs declarations, anonymity, high volume levels, rapid delivery and the ability to shift between companies to evade detection. Box 2. The rise of synthetic drugs • While plant-based narcotics such as cocaine and heroin remain central to illicit markets, there is an increasingly urgent need to address the traffic of synthetic drugs – particularly fentanyl, methamphetamines, and nitazenes. • UNODC data indicate that global opioid use doubled from an estimated 26 -36 million users in 2010 to 61.3 million in 2020. The synthetic drug scene is developing rapidly. In 2009, only one synthetic opioid had been identified; by 2021, that number had risen to 88. (Penington Institute, n.d.[2]) • The potency-to-volume ratio of synthetic drugs means that very small shipments can satisfy

synthetic opioid had been identified; by 2021, that number had risen to 88. (Penington Institute, n.d.[2]) • The potency-to-volume ratio of synthetic drugs means that very small shipments can satisfy entire markets. A few kilograms of fentanyl can supply entire national markets and just 2 mg – comparable to a few grains of sand – is enough to cause an overdose. (U.S. Customs and Border Protection, 2026[3]) • Synthetic drug manufacturing is highly adaptable. Production does not depend on land, crops, or seasonal cycles. Laboratories require only precursor chemicals (often low cost), basic equipment, and access to distribution networks. As a result, synthetic drug manufacturing can occur anywhere, from rural hideouts to urban industrial facilities, and can be quick ly re-established if dismantled, and seized shipments easily replaced. • Non-transparent FTZs are playing an increasing role in this traffic, for example by facilitating the registration of front companies involved in distributing precursor chemicals. Investigations reveal thousands of registered companies in Asia involved in p roducing or marketing fentanyl precursors, many of which operate openly on e -commerce platforms. Some of these firms are in or linked to FTZs, providing them with cover as legitimate chemical exporters. Why is this important? Criminals are exploiting modern trade infrastructure to traffic narcotics, contributing to a significant public health crisis. The World Health Organization (WHO) reports that psychoactive drugs are responsible for4 

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

600 000 deaths per year globally (WHO, 2024[4]). Over the past two decades, drug overdose deaths have risen sharply across many regions, largely driven by opioids (including fentanyl and new synthetic equivalents). Although cannabis remains the most widely used drug globally, opioids are responsible for more than two-thirds of all drug overdose deaths (Penington Institute, n.d.[2]). Maintaining effective trade facilitation while combating illicit trade requires a balanced approach that

equivalents). Although cannabis remains the most widely used drug globally, opioids are responsible for more than two-thirds of all drug overdose deaths (Penington Institute, n.d.[2]). Maintaining effective trade facilitation while combating illicit trade requires a balanced approach that protects supply chains without creating unnecessary barriers for legitimate businesses. FTZs, for example, play a central role for many countries and leading manufacturers, facilitating trade by reducing barriers and streamlining the movement of goods. However, poorly regulated and non -transparent FTZs are hubs for illicit trade, including drug smuggling . OECD work bridges this gap by promoting additional transparency and oversight for FTZs. The OECD Council adopted the Recommendation on Countering Illicit Trade: Enhancing Transparency in Free Trade Zones [ OECD/LEGAL/0454] (“the Recommendation”) in October 2019 to strengthen transparency and reduce illicit activity in FTZs. It calls on adherents to promote a voluntary Code of Conduct that ensures proper oversight of operators, improves co-operation with authorities, and enhances access to information for investigations. The WP -CIT has developed a monitoring mechanism consisting of a Certification Scheme for Clean Free Trade Zones and criteria for selecting external certification bodies, now being rolled out through pilots, training, and awareness efforts. FTZs in Spain and Costa Rica are amongst the first to obtain certification, with the OECD issuing its first three Clean FTZ Certificates in 2025. The Expert Network on FTZs under the WP -CIT supports implementation by facilitating collaboration and sharing best practices among agencies involved in combating illicit trade (OECD, 2025[5]). What can policymakers do? Through the WP-CIT, the OECD convenes policymakers, enforcement agencies, industry leaders, and other international organisations to address illicit trade, bringing together expertise from a range of policy areas and actors. To combat illicit trade in narcotics while continuing to promote trade facilitation, policymakers should: • Pursue a whole-of-government approach. Co-ordinated efforts allow integrated policy design, shared intelligence and aligned enforcement efforts that ensure coherent and effective outcomes.

policy areas and actors. To combat illicit trade in narcotics while continuing to promote trade facilitation, policymakers should: • Pursue a whole-of-government approach. Co-ordinated efforts allow integrated policy design, shared intelligence and aligned enforcement efforts that ensure coherent and effective outcomes. • Deepen international co -operation. This is essential to improve government policies by sharing best practices, addressing governance gaps and pursuing international standards. Co-ordinated monitoring, real -time information sharing and responses maximise enforcement efforts. • Invest in public-private partnerships to disrupt criminal networks. Stronger co -operation and exchange of best practices with trade intermediaries, postal and shipping services, free trade zones (FTZs), logistics firms and e -commerce platforms are critical to improve information sharing and strengthen screening protocols. • Encourage adherence to the OECD Recommendation of the Council on Countering Illicit Trade: Enhancing Transparency in Free Trade Zones to promote transparency in FTZs. Encouraging FTZs to implement the associated Code of Conduct for Clean Free Trade Zones and businesses to engage with clean FTZs will contribute to combatting illicit trade in narcotics. • Make inspection smarter by adopting and developing innovative enforcement technologies that strengthen inspection capacity and limit impacts on trade facilitation efforts. For example, by adopting artificial intelligence, data-driven risk analysis and predictive targeting. • Consider concerns related to illicit narcotics trade when undertaking regulatory reform (i.e. of precursor chemicals, e-commerce platforms). 5

HOW DRUG TRAFFICKERS EXPLOIT MODERN TRADE SOLUTIONS © OECD 2026

References

OECD (2025), Report on the implementation of the OECD Recommendation on countering illicit trade: enhancing transparency in free trade zones, https://www.oecd.org/content/dam/oecd/en/events/2025/06/mcm/MCM-2025-Report-on-theImplementation-of-the-OECD-Recommendation-on-Countering-Illicit-Trade.pdf. [5]

https://www.oecd.org/content/dam/oecd/en/events/2025/06/mcm/MCM-2025-Report-on-theImplementation-of-the-OECD-Recommendation-on-Countering-Illicit-Trade.pdf. [5] Penington Institute (n.d.), International Overdose Awareness Day – Facts & Stats, https://www.overdoseday.com/facts-stats/ (accessed on 30 January 2026). [2] U.S. Customs and Border Protection (2026), Frontline Against Fentanyl, https://www.cbp.gov/border-security/frontline-against-fentanyl (accessed on 30 January 2026). [3] UNCTAD (2025), UNCTAD releases new seaborne trade statistics, https://unctad.org/news/shipping-data-unctad-releases-new-seaborne-trade-statistics. [1] WHO (2024), World Health Organization, https://www.who.int/news/item/25-06-2024-over-3million-annual-deaths-due-to-alcohol-and-drug-use-majority-among-men/ (accessed on 30 January 2026). [4]

Explore further OECD, Recommendation on Countering Illicit Trade: Enhancing Transparency in Free Trade Zones

[OECD/LEGAL/0454].

OECD, Free Trade Zones, https://www.oecd.org/en/topics/free-trade-zones.html. Contact Piotr STRYSZOWSKI ( Piotr.STRYSZOWSKI@oecd.org) Sophie FLAHERTY ( Sophie.FLAHERTY@oecd.org) This work is published under the responsibility of the Secretary -General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.

Sophie FLAHERTY ( Sophie.FLAHERTY@oecd.org) This work is published under the responsibility of the Secretary -General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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