MALTA: Smuggling of Illegal Drugs


In the Maltese external sector statistics, an estimate for narcotics is included in the goods account. This estimate is computed by the National Accounts Unit.

Scope, Methodology, Compilation Practices, and Data Sources

The estimate for narcotics is incorporated in national accounts as from 1995 onwards and in balance of payments (BOP) as from 2004 onwards and is equivalent to the margin between the estimate of consumers’ consumption and imports registered in the BOP data.

Where data was not available to the National Statistics Office (NSO), in particular for certain types of illegal activities, estimates were based on data averages and information obtained from police, non-governmental organisations (NGOs) and associations. At times, data was arrived at after a wide internal discussion within the NSO.

The main data sources for the compilation of illegal substances include:

  • Licit and illicit drug use in Malta 2001, Korf and Benshop, University of Amsterdam, Bonger Institute of Criminology, February 2002;
  • National Report to the European Monitoring Centre for Narcotics and Drug Addiction, Reitox National Focal Point Malta, National Commission on the Abuse of Narcotics, Alcohol and Other Dependencies, National Focal Point for Narcotics and Drug Addiction (various years); and
  • Lifestyle Survey 2007, NSO, 2009.

The illicit drug estimate initiates from the population figure of residents in the age bracket of 18 to 65 years. This figure is available directly from the Population and Tourism Statistics Unit. A ratio of 3.2 percent is extracted from the 2007 NSO Lifestyle Survey which represents the last year prevalence rate of residents of Malta aged 18 to 65. This ratio is applied to this specific population in order to derive the population of residents who made use of any kind of drug during a calendar year. A breakdown of this figure by drug type is calculated according to the 2001 illicit drug survey except for Heroin. The 2001 Licit and illicit drug use was used extensively for the period 1995 to date to determine the amount of drug users with respect to Cannabis, Cocaine, Amphetamines, Ecstasy and LSD. A new update of this survey became available in 2015. The initial results of this particular survey revealed that the last year prevalence rates of Heroin, Cocaine, Cannabis, Ecstasy, LSD and Amphetamine were 0.1 percent, 0.3 percent, 0.8 percent, 0.2 percent, 0.1 percent and 0.04 percent respectively (Licit and illicit drug use in Malta 2001). The prevalence year for heroin was ignored due to better sources while the prevalence year of cocaine and cannabis was extrapolated forward according to the data on trends of treated clients provided by several drug treatment providers over the years (e.g. National Report 2012). These prevalence rates for Cocaine, Cannabis, Ecstasy, LSD and Amphetamines are applied to the population figure of 18-65 years old.

The sum of drug users derived from the last year prevalence rates is usually less than the figure derived from the lifestyle survey ratio. Hence, drug users for all the narcotics excluding Heroin is topped up. Data on Heroin users is available almost on a yearly basis from the National Report to the European Monitoring Centre for Drugs and Drug Addiction. The estimate of the total Heroin users is available directly from the annual report referred to as ‘problem-drug use’ estimated using capture-recapture sampling, based on data from Maltese daily opiate users attending treatment service.

The total population by type of drug has been adjusted as follows:

  • Drug users undergoing treatment are deducted as these do not buy narcotics from the market, however, it is assumed that 2 percent of these still buy occasionally from the market; The number of treated clients is extracted from the National Overview of the Allowances for Exhaustiveness Report 2012 and these clients are not treated as regular clients as they are generally on substation treatment (methadone). Hence they do not consume illegal narcotics. A further adjustment is made to account for those clients who are in substitute treatment but who still secretly consume (2 percent). The existence of such clients was confirmed with drug-related treatment NGOs.
  • An adjustment is made to eliminate the number of one time users who consumed some kind of drug during that particular year but are neither regular users nor occasional users. The number of Cocaine users is topped down by 15 percent, Cannabis users are topped down by 40 percent while ecstasy, LSD and Amphetamines are topped down by 10 percent. There is no adjustment for Heroin as heroin is regarded as a very addictive drug and there are generally no one time users, nor occasional users. This adjustment is based on data obtained from ISTAT (Measuring Illegal Activities – Italy).
  • Distribute these ‘net’ drug users between regular users and occasional users by type of narcotics. Heroin users were all placed as regular users due to the nature of the drug consumed while users of other narcotics were distributed 16 percent and 84 percent for regular users and occasional users, respectively. This adjustment is based on data obtained from ISTAT (Measuring Illegal Activities – Italy).

The consumption trends used in this assumption were according to the hypothesis by Mazzager for Heroin, a German study for Cocaine and hypotheses used by ISTAT were applied for the rest. These figures were also verified by local NGOs and considered reasonable. This calculation leads to the total amount of grams and is then multiplied by the average street prices by type of drug. Prices are obtained from the various editions of the National Report to the European Monitoring Centre for Narcotics and Drug Addiction. These street prices are also available in the National Report 2012. Ultimately, this provides the total consumption to be included in the private household consumption expenditure. Law enforcement officers and various agencies confirmed that no actual production facilities for narcotics exist in Malta. This implies that narcotics are imported.

Linkages Across Statistical Domains

The Business Register (BR) does not include producers involved in underground or illegal activities. However, these are catered for in national accounts. Value of production activities that are not directly observed are, in principle, included within the national accounts production boundary. Exhaustiveness adjustments amount to 3.7 percent of total gross value added (GVA) at basic prices in the production approach. The production approach includes adjustments for:

  • N1 - Producer deliberately not registering - underground; in relation to furniture production (Section C - Manufacturing) and domestic help (Section T - Activities of households as employers);
  • N2 - Producers deliberately not registering - illegal; are reported for illegal gambling, prostitution and narcotics in gambling and betting activities (NACE 92, Section R); Other personal service activities (NACE 96, Section S) and wholesale trade, except of motor vehicles and motorcycles (NACE 46, Section G) respectively.

Prostitution and narcotics were included in national statistics for the first time in the European system of accounts (ESA) 2010 time series for the period 1995 to date. The likely earnings from prostitution are now included in other personal services (NACE 96) in the output approach and in household final consumption expenditure in the expenditure approach. The margins earned on narcotics were included in the output of wholesale and retail trade (NACE G), while total value of narcotics consumed is included in private household consumption expenditure and imports are valued at the wholesale price.

Current Challenges and Conclusions

Malta estimates prostitution from the supply-side. In the case of the Maltese context, data sources are very limited and do not fit national accounts purposes. For this reason, it was not possible to make a separate estimate for different types of prostitution (e.g. street, brothel, apartment, club) as requested by the GNIC/230 on illegal activities in national accounts. The same situation applies for the share consumed by resident and non-resident prostitutes. To this end, no estimate for prostitution is currently recorded in BOP data.