Financial Crime World

Eritrea’s Shadow Economy: Human Trafficking, Arms Smuggling, and Financial Crimes Thrive Amidst Authoritarian Rule

Overview

Eritrea, located in the horn of Africa, is a significant contributor to the region’s illicit activities. With one of the highest prevalences of human trafficking in Africa, the small East African nation is plagued by a myriad of criminal enterprises.

Human Trafficking

  • The Compulsory National Service (Sawa) in Eritrea, which functions as bonded labor, breeds resentment and significant emigration.
  • Human trafficking flourishes due to harsh exit control procedures, limited passport issuance, and militarized borders.
  • Smuggling networks exploit Eritrean refugees, leaving the country and senior military officers profit from smuggling for private gain.

Arms Smuggling

  • Eritrea’s strategic location on the Red Sea makes it a prominent trans-shipment point for arms trafficking to neighboring embargoed states like Sudan, South Sudan, and Somalia.
  • The government’s history of conflict with Ethiopia and Djibouti fuels the illegal flow of arms.

Illicit Activities

  • Eritrea has also been involved in wildlife trafficking, mainly for ivory and rhino horn.
  • The country’s ports are used for illegal, unreported, and unregulated fishing, and for the illicit trade of gum arabic and frankincense.
  • Gold smuggling from Sudan to the UAE is the second-largest export from the country.
  • Eritrea’s ports serve as crucial points along heroin smuggling routes towards Europe and the Americas.

Criminal Actors

  • Organized criminal activity in Eritrea is predominantly carried out by state and military actors and those closely associated with them.

Challenges to Combating Organized Crime

  • The lack of transparency from the Eritrean government and ongoing authoritarian rule hinder efforts to combat organized crime.
  • The country has weak law enforcement capacities, and corruption and bribery are rampant.
  • Eritrea has made efforts to build partnerships to counter human trafficking and strengthen its capacities.

International Engagement

  • Eritrea remains party to international treaties relevant to anti-organized crime.
  • The government has taken some steps to strengthen relationships with neighboring countries and organizations.