BELFAST, May 25 (AFP) - Northern Ireland may be officially at peace, but the "mafia-style" operations of the province's paramilitary organisations are flourishing as never before, police say. Throughout the past 30 years of political violence, the frontier between "political" and common law crimes was always difficult to define, as much for the Catholic as for the Protestant paramilitary groups. To finance their "war", all of them engaged in activities which in other circumstances are the preserve of organised criminal gangs, like extortion, drug trafficking, fraud or counterfeiting for example. Optimists believed that the peace deal signed a year ago and the subsequent lull in terrorist activity would lead to a decline in paramilitary "mafia" crime. This has not happened. "Most of the paramilitary people are unemployed and unemployable and they need some money," an official close to local police told AFP. In Protestant loyalist areas, "the extortion of funds from businesses is dramatically on the increase" the official said. In cases where the paramilitaries used to pressure people on their side to contribute funds "to the war effort", today they pretext the need to finance the resettlement of dozens of prisoners recently freed from jail. Those who refuse to pay up, do so at their peril. Earlier this month, an art dealer in Belfast who refused to be intimidated, was the target of an arson attack on his picture gallery. Drug trafficking, in cannabis and heroin is on the increase. But while the loyalists generally direct the operations themselves, the Irish Republican Army (IRA) usually prefers to take its cut from common criminals in exchange for protection. The movement Direct Action Against Drugs (DAAD), widely seen as an IRA front organisation, is believed to have eliminated nine "dealers" over the past five years. While claiming to be conducting a moral crusade against "deviants", police say the IRA is in fact eliminating obstacles to its own operations. Brendan Fegan, 24, an independent drug lord in the Catholic stronghold of Newry was the latest such victim. He died on May 9 after being riddled by 15 bullets while drinking in a pub. "These groups on both sides want to continue to control the areas where they are strong. We have a mafia here which is well established, coming from both communities," said Sam Cushnahan, director of the group Families against Intimidation and Terror which is campaigning against the paramilitaries. Police say the IRA is in the process of transforming itself into a purely criminal organisation and is trying to diversify its operations for when the peace process, now stalled over IRA disarmament, is finally completed. "They're getting away from obvious criminal activities to more subtle and sophisticated ones," the official said. The IRA is said to have started buying up bars, restaurants, hotels, shops and filling stations and is even reported to have begun transferring liquid cash to foreign bank accounts, particularly in tax havens so as to escape Northern Ireland's strict banking regulations. "They're using professional financial advisers, accountance advisers in order to have a sane and on the surface, legal financial basis," the source said, adding: "They're looking to reinvest outside, in tax havens for instance." In response to this trend, Northern Ireland police has beefed up its financial brigade and consults regularly with the US Federal Bureau of Investigation on anti-mafia strategies. "The development and the diversity of the criminal activities coming from the paramilitary groups will be a major problem for Northern Ireland in the coming 20 to 30 years," whether there is peace or not, the official said.  