As Prepared for Delivery
 
Good afternoon ladies and gentlemen.  It is a privilege to be here with so many colleagues and partners from around the world who share a commitment to our mutual security.
 
It’s a pleasure to be here in this beautiful city that in less than four years will host the 22nd Winter Olympic games—a well-deserved honor for the Russian Federation.
 
In Washington, our professional ice hockey team has been fortunate to enjoy the talents of a Russian superstar—Alexander Ovechkin. I assure you that while we Americans look forward to competing here in Sochi, we don’t look forward to having to play against Mr. Ovechkin and his national team.
 
I’d like to thank my friend and counterpart Secretary Nikolai Patrushev for hosting this important and timely event, and for being a partner on so many critical issues that both of our countries face, from arms control and non-proliferation to the fight against violent extremism.
 
Let me also congratulate Ambassador Fedotov on his appointment as the new Executive Director of the United Nations Office on Drugs and Crime.  Ambassador, your office has a lot of work ahead of it and the United States looks forward to working with you in a very constructive and helpful way.
 
It is an honor to be with you today—especially because, not that long ago, the presence of a U.S. national security advisor at a gathering such as this in Russia  might have seemed unlikely.  Prior to President Obama’s inauguration, our two nations had been drifting further apart, more than at any point since the Cold War. We were spending too much time mired in mutual distrust, and too little time addressing our mutual concerns about our relationship and the world in which we live.    
 
At the outset of his administration, President Obama pledged to reset our relationship with Russia, so that—even as we are candid about any disagreements—we could recommit ourselves to advancing our common interests.  And that is precisely what we have accomplished—together!
 
The United States and Russia have coordinated our efforts to strengthen the global economic recovery.  We’re working together on Afghanistan and we’ve deepened our cooperation against the violent extremism that threatens both our people.  With our international partners, we’re working to prevent the spread of nuclear weapons.  
 
And, of course, we’ve agreed to the New Start Treaty, the most far-reaching arms control agreement in nearly 20 years.  As President Obama said when he and President Medvedev signed the Treaty in Prague, “there is much we can do on behalf of our security and prosperity if we continue to work together.”
 
That is what I want to focus on today—another critical area where we can work together: confronting transnational crime.  Today, right now, we have an opportunity for cooperation not just between the United States and Russia, but among all nations represented here today.   It’s up to us to seize the moment at this important conference.
 
Every year, the United States government produces a handful of so-called National Intelligence Estimates, exhaustive studies that examine our most important national security threats.  The results of this year’s study of transnational crime—our first since 1995—are astonishing.
 
We found that this threat alone—which generates trillions of dollars annually from illicit activities such as money laundering, trafficking, counterfeiting, environmental crime, and financial fraud— has completely transformed itself in recent years.  
 
What had emerged, to paraphrase Dostoyevsky from Crime and Punishment, was the beginning of a new story, a new reality  about which much of the law-abiding world has been for too long completely, and dangerously,  unaware.
 
As recently as the 1990s, organized crime syndicates were rigid hierarchical structures that were largely domestic or regional in scope. They made limited use of technology, and had minimal links to other illicit organizations like drug cartels or terrorist groups.  And because of their centralized structures, the arrest of a single key member was sometimes enough to disrupt or dismantle them.
 
Things are not so simple anymore—unfortunately, the problem is more complex and threatening.
 
Today, many of these criminal syndicates operate globally; they are comprised of loose networks that cooperate intermittently but maintain their independence; and they employ sophisticated technology and financial savvy.
 
They are raising the specter of significant damage to the global economy by increasing their penetration of legitimate markets—blending illicit and ordinary business practices—and by conducting ever-more sophisticated cyber crimes that undermine trust in the security of our financial system.
 
Much like major terrorist organizations, criminal syndicates compartmentalize their activities so that no single person knows the details of the entire operation. Apprehending even a key figure may have little to no effect.  Enterprises that once focused on particular illicit activities are increasingly diversifying their operations.   If we do not act together to prevent them, these trends will only continue to intensify in the years to come.  And that is something that should concern all our nations.  In a world full of transnational threats, transnational crime is in an ascendant phase.
 

Using bribery, fraud, violence, and state relationships, enhanced by technology, transnational criminal organizations will increasingly damage the ability of legitimate businesses to compete in the global market space.
 
They will continue to develop their alliances with corrupt and complicit state officials, undermining the rule of law and enabling criminals to dodge regulation and flood the world market with pirated—and sometimes deadly—products that threaten industries dependent on intellectual property such as fashion, pharmaceuticals and technology.
 
And many criminal groups are broadening beyond their core functions into an ever wider range of criminal activities.  The global drug trade is now expanding to criminal groups in countries like Russia, China, Italy and the Balkans – countries that had not previously been victimized by narcotics trafficking.  Opium and heroin trafficked from Afghanistan funds the Taliban as well as insurgents and criminal groups in Central Asia, the Caucasus and Russia.  And the consequences are heartbreaking for families and communities as these illicit activities can be accompanied by unspeakable violence.
 
The United States is deeply concerned that transnational criminal organizations, especially in Mexico, are not only on the rise, but acquiring more powerful weapons.  We are taking strong action along with our Mexican partners to reverse this trend.
 
We have also seen an increase in violence associated with human smuggling, as drug trafficking organizations and other criminal groups are attracted by high profits, low chances of arrest and prosecution, and minor penalties.
 
Elsewhere, following the example of the Taliban and the Revolutionary Armed forces of Colombia, or FARC, terrorists and insurgent groups are increasingly turning to crime and criminal networks—and particularly to drugs—for funding and logistical support.   Clearly, this is evident in Afghanistan today.
 
Most troubling of all is the trend that this enhanced collaboration is leading  to criminals helping terrorists acquire weapons of mass destruction, a development that could threaten all our nations.  
 
This lethal nexus of organized crime, narco-trafficking, and terrorism is a threat that the United States, Russia and all of us share and should be working together to combat.   As criminal enterprises grow increasingly global, complex and sophisticated, only a multidimensional, multilateral strategy can combat them; one that takes advantage of the full range of our capabilities.
 
A gathering like this one confirms that transnational crime is no longer solely a public safety or law enforcement problem that is the exclusive purview of domestic authorities.  Rather, it is a threat to the security of each of our nations that we must address together.  

There are several steps we can take.

First, we must organize around a set of fundamental principles. These should include:

·     Protecting our citizens’ from the violence and exploitation of criminal networks;
·     Helping vulnerable countries fight corruption and foster good governance, and sever powerful state-crime relationships;
·     Breaking the financial infrastructures of transnational criminal networks;
·     And building international consensus and cooperation.

To meet these principles, let me suggest several priorities for action.

We should strengthen traditional law enforcement functions such as interdiction, investigations and prosecutions, while doing a better job of sharing with each other the information we uncover.

We should better protect our economies by denying criminals access to the international financial system. And we should harden our markets against them by exposing their business interests, stripping their financial assets, and ultimately locking them out of the corporate board room. This requires strong laws and authorities that match today’s business savvy criminals, and stronger partnerships between governments and the financial sector.

We should seek new ways to disrupt drug trafficking, which facilitates so many other illicit enterprises.   As the one of the world’s largest consumers of illegal drugs, the United States has a special responsibility in this area.  Last May, President Obama released our new National Drug Control Strategy, our plan to reduce domestic drug abuse over the next 5 years, largely through treatment, education, and prevention.  We are determined to do our part.
 
We should also make it more difficult for smugglers and traffickers to ply their trade, by protecting our borders, taking steps to prevent criminals from traveling, providing better training for border security professionals, developing strong watch lists and making greater use of biometrics.
 
We should target those who facilitate criminal activities. As criminal networks expand—and the threats they pose converge—they are increasingly reliant on facilitators who operate in both the licit and illicit worlds and provide services such as funding, logistics and the acquisition of weapons, false documents and other materials.

Countries like the United States must also help improve the capabilities of our emerging and developing partner states, which too often involuntarily provide safe haven for criminal networks.  This means proactively supporting such countries in their efforts to build accountable, transparent, and capable institutions that can enforce the rule of law and act as our partners to counter these threats.  Waiting until it is too late is not a good answer.
 
And finally, we should continue to build partnerships within multilateral institutions, because threats that respect no borders must be met by corresponding solutions.  Toward that end, the United States strongly supports the UN Convention Against Corruption and the Convention on Transnational Organized Crime.
 
Let me just conclude by saying that in the Obama Administration’s National Security Strategy, published earlier this year, we laid out America’s enduring national interests—security, prosperity, respect for universal values, and an international order that can meet the challenges of the 21st century.  
 
The expanding size, scope, and influence of transnational crime threatens each of those principles, and is one of the most significant security challenges we face—as a nation, and as an international community. No nation, no matter how powerful, can tackle it alone. And we look forward to working together—with Russia and with the nations you represent —to help shape a better future for each of our countries.
 
Once again, I would like to thank our hosts for their vision in deciding to hold such an important conference.
 
Thank you for your kind attention.