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2018 | OriginalPaper | Chapter

4. Measuring Illicit Trade and Its Wider Impact

Author : Karl Lallerstedt

Published in: Organized Crime and Illicit Trade

Publisher: Springer International Publishing

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Abstract

Illicit trade is a broad and varied collection of phenomena requiring a broad palette of coordinated policy responses. But unlike the threat of terrorism, which produces highly visible incidents, most of the times illicit trade remains below the surface, impeding the mobilisation of the prerequisite political will to address the threat. These challenges underline the need for better data to quantify and assess the impact of illicit trade, in order to empower policymakers to gauge their policy response more appropriately.

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previous chapter IT and Cyber Capabilities as a Force Multiplier for Transnational Crime

next chapter Catalysing and Evaluating Development Responses to Organized Crime

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Ibid.

James Bargent, ‘Colombia Criminals Use Paraguay Contraband Cigarettes to Launder Drug Money’, InSight Crime, 24 March 2014, http://www.insightcrime.org/news-briefs/colombia-criminals-use-paraguay-contraband-cigarettes-to-launder-drug-money.

Paul Rexton Kan, Bruce E. Bechtol, Jr. and Robert M. Collins, ‘Criminal Sovereignty: Understanding North Korea’s Illicit International Activities’, Strategic Studies Institute, March 2010, http://www.strategicstudiesinstitute.army.mil/pdffiles/pub975.pdf.

Vadzim Smok, ‘The art of smuggling in Belarus’, Open Democracy, 2 February 2015, https://www.opendemocracy.net/od-russia/vadzim-smok/art-of-smuggling-in-belarus.

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James Risen, ‘Reports Link Karzai’s Brother to Afghanistan Heroin Trade’, The New York Times, 4 October 2008, http://www.nytimes.com/2008/10/05/world/asia/05afghan.html?pagewanted=all&_r=0.

Discussions and interviews with the author.

Guy Dinmore, ‘Berlusconi ally extradited to Italy from Lebanon’, Financial Times, 13 June 2014, http://www.ft.com/intl/cms/s/0/ea4bbf6e-f2eb-11e3-85cd-00144feabdc0.html#axzz3UN5C2lXW.

Michael Day, ‘Silvio Berlusconi’s links with Italian organized crime confirmed’, The Independent, 12 May 2014, http://www.independent.co.uk/news/world/europe/silvio-and-the-cosa-nostra-berlusconis-links-with-italian-organized-crime-confirmed-9358790.html. The dominant political figure in post war Italy, seven-time Prime Minister Giulio Andreotti, was put on trial for mafia association. In July 2003 the appeal court of Palermo acquitted him on charges of complicity with the mafia, but it upheld the prosecution’s case that the former prime minister had been engaged in criminal association until 1980. The charges lapsed under the statute of limitations. These two court rulings confirm long running collusion between the mafia and the most powerful politicians in Italy. See Guy Dinmore, ‘Former Italian PM Giulio Andreotti dies’ Financial Times, 6 May 2013, http://www.ft.com/cms/s/0/949e39b0-b643-11e2-b1e5-00144feabdc0.html#ixzz3UOSwwPOC.

Jane Croft, ‘Putin Accused of presiding over ‘mafia state’ at Litvinenko probe’, Financial Times, 27 January 2015, http://www.ft.com/intl/cms/s/0/998d690c-a62c-11e4-9bd3-00144feab7de.html#axzz3UuujrUQt.

Mark Galeotti, ‘How the Invasion of Ukraine is Shaking Up the Global Crime Scene,’ Vice, 6 November 2014, http://www.vice.com/read/how-the-invasion-of-ukraine-is-shaking-up-the-global-crime-scene-1106.

Ivan Briscoe, Catalina Perdomo, and Catalina Uribe Burcher (eds.), ‘Illicit Networks and Politics in Latin America’, International IDEA, 2014, http://www.idea.int/publications/illicit-networks-and-politics-in-latin-america/en.cfm.

Ibid.

‘Anti-Corruption Measures in EU Border Control’, Sofia, BG: Center for the Study of Democracy (Frontex 2012), http://www.csd.bg/artShow.php?id=16109.

Ibid.

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Karl Lallerstedt and Mikael Wigell, ‘Illicit Trade Flows: How to deal with the neglected economic and security threat’, Finnish Institute of International Affairs (FIIA), Briefing Paper 151, 12 March 2014, http://www.fiia.fi/en/publication/405/illicit_trade_flows/.

Kan, Bechtol, Jr. and Collins, ‘Criminal Sovereignty: Understanding North Korea’s Illicit International Activities’.

Ibid.

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‘Integrated Prevention Services for HIV Infection, Viral Hepatitis, Sexually Transmitted Diseases, and Tuberculosis for Persons Who Use Drugs Illicitly: Summary Guidance from CDC and the U.S. Department of Health and Human Services’, Centers for Disease Control and Prevention, Recommendations and Reports 9 November 2012 / 61(RR05), pp. 1–40, http://www.cdc.gov/mmwr/preview/mmwrhtml/rr6105a1.htm.

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Ibid.

In sub-Saharan Africa 35% of all tested drugs failed chemical analysis, suggesting that substandard medication is a broader problem beyond counterfeiting. In the Asian countries 35% failed chemical analysis, a very similar proportion to that classified as falsified. Ibid.

Ibid.

Paul N Newton, Patricia Tabernero, Prabha Dwivedi, Maria J Culzoni, Maria Eugenia Mange, Isabel Swarnidoss, Dallas Mildenhall, Michael D Green, Richard Jähnke, Miguel dos Santos de Oliveira, Julia Simao, Nicholas J White and Facundo M Fernandez, ‘Falsified medicines in Africa: all talk, no action,’ The Lancet, vol. 2, September 2014, e509–510, http://www.thelancet.com/pdfs/journals/langlo/PIIS2214-109X(14)70279-7.pdf.

‘Protocol to Eliminate Illicit Trade in Tobacco Products opened for signature’, WHO, 10 January 2013, http://www.who.int/mediacentre/news/releases/2013/fctc_20130110/en/.

Robert West, Joy Townsend, Luk Joossens, Deborah Arnott and Sarah Lewis, ‘Why combatting tobacco smuggling is a priority’, British Medical Journal, 337:a1933, October 2008, http://www.bmj.com/content/337/bmj.a1933.

‘Global Status Report on Alcohol and Health’, WHO (Geneva: WHO, 2011), http://www.who.int/substance_abuse/publications/global_alcohol_report/msbgsruprofiles.pdf.

Rebecca Smithers, ‘New year revellers warned of dangers of counterfeit alcohol’, The Guardian, 31 December 2012, http://www.theguardian.com/society/2012/dec/31/new-year-fake-alcohol-warning.

‘The Illegal Alcoholic Beverages Market in Six Countries’, Euromonitor International, 2013, http://www.euromonitor.com/medialibrary/PDF/ILLEGALALCOHOLEUROMONITOR.pdf.

Dirk W Lachenmeier, Unrecorded and illicit alcohol, http://www.euro.who.int/__data/assets/pdf_file/0020/191360/2-Unrecorded-and-illicit-alcohol.pdf.

James Fogarty, ‘The Demand for Beer, Wine and Spirits: Insights from a Meta Analysis Approach’, American Association of Wine Economists, Working Paper no. 31, November 2008, http://www.wine-economics.org/workingpapers/AAWE_WP31.pdf.

Justin Picard, ‘Can We Estimate the Global Scale and Impact of Illicit Trade?’, in Miklaucic and Brewer (eds.), Convergence: Illicit Networks and National Security in the Age of Globalization, pp. 37–60.

Ibid.

Christina Katsouris and Aaron Sayne, ‘Nigeria’s Criminal Crude: International Options to Combat the Export of Stolen Oil’, Chatham House, September 2013, http://www.chathamhouse.org/sites/files/chathamhouse/public/Research/Africa/0913pr_nigeriaoil.pdf.

Hannah Mills, Sara Skodbo and Peter Blyth, ‘Understanding Organized Crime: estimating the scale and the social and economic costs’, UK Home Office, Research Report 73, October 2013, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/246390/horr73.pdf.

‘The Economic Costs of Drug Abuse in the United States, 1992–2002’, Executive Office of the President (Washington DC: Office of National Drug Control Policy, December 2004), https://www.ncjrs.gov/ondcppubs/publications/pdf/economic_costs.pdf.

Picard, ‘Can We Estimate the Global Scale and Impact of Illicit Trade?’, in Miklaucic and Brewer (eds.), Convergence: Illicit Networks and National Security in the Age of Globalization.

‘Crime and Violence in Central America: A Development Challenge’, The World Bank, 2011, http://siteresources.worldbank.org/INTLAC/Resources/FINAL_VOLUME_I_ENGLISH_CrimeAndViolence.pdf.

Ibid., p. ii.

Ibid.

Dev Kar and Brian LeBlanc, ‘Illicit Financial Flows to and from the Philippines: A Study in Dynamic Simulation, 1960–2011’, Global Financial Integrity, February 2014, http://www.gfintegrity.org/wp-content/uploads/2014/05/Illicit-Financial-Flows-to-and-from-the-Philippines-Final-Report.pdf.

Katsouris and Sayne, ‘Nigeria’s Criminal Crude: International Options to Combat the Export of Stolen Oil’.

Keith Johnson, ‘U.S. Strikes ISIS Oil Installations’, Foreign Policy, 24 September 2014, http://foreignpolicy.com/2014/09/24/u-s-strikes-isis-oil-installations/.

‘The Report of the Commission on the Theft of American Intellectual Property’, The IP Commission Report, May 2013, p.2, http://www.ipcommission.org/report/IP_Commission_Report_052213.pdf.

Ibid. A 2017 update to the IP Commission report estimated that the annual cost to the U.S. economy continued to exceed US$ 225 billion in counterfeit goods, pirated software and the theft of trade secrets, and could be as high as US$ 600 billion. ‘Update to the IP Commission Report’, The Theft of American Intellectual Property: Reassessments of the Challenge and United States Policy, 2017, http://www.ipcommission.org/report/IP_Commission_Report_Update_2017.pdf.

Illicit Trade Flows: How to deal with the neglected economic and security threat, Finnish Institute of International Affairs Briefing Paper No. 151 (Helsinki: Finnish Institute of International Affairs: March 12, 2014).

‘Operation Smoking Dragon’, Federal Bureau of Investigation (FBI), 5 July 2011, http://www.fbi.gov/news/stories/2011/july/dragon_070511.

Some such efforts have been made despite the data challenges. An organisation called the International Policy Network released a report in 2009 estimating that counterfeit antimalarial and tuberculosis medication alone caused 700,000 death per year, but the reliability of this figure is highly questionable. In 2013 the UN publication Africa Renewal cited a WHO estimate that 100,000 people died every year from counterfeit drugs in Africa, but the methodology used to derive this estimate is not clear. See Jocelyne Sambira, ‘Counterfeit drugs raise Africa’s temperature’, Africa Renewal, May 2013, http://www.un.org/africarenewal/magazine/may-2013/counterfeit-drugs-raise-africa’s-temperature.

Karl Lallerstedt and Patrick Krassén, ‘How leading companies are affected by counterfeiting and IP infringement—A study of the NASDAQ OMX 30 Stockholm Index’, The Swedish Confederation of Enterprise (Svenskt Näringsliv), May 2015, http://www.svensktnaringsliv.se/migration_catalog/Rapporter_och_opinionsmaterial/Rapporter/omx30_english_webbpdf_617515.html/BINARY/OMX30_English_webb.pdf.

‘Project Sun: A study of the illicit cigarette market in the European Union 2013 Results’, KPMG, 2014 http://www.pmi.com/eng/media_center/media_kit/documents/sun%20report%202013.pdf.

‘Socio-Economic Impact of Counterfeiting, Smuggling and Tax Evasion in Seven Key Indian Industry Sectors’, Federation of Indian Chambers of Commerce and Industry, 2012, http://www.ficci.com/publication-page.asp?spid=20190.

‘FY2013 Survey Report on Losses Caused by Counterfeiting Was Compiled’.

The fact that the EU is a political union of 28 member states is also a factor that makes coordinated policy prioritisation challenging, but that does not remove the need for underlying data indicating the loss suffered to EU business by global counterfeiting.

Title: Measuring Illicit Trade and Its Wider Impact
Author: Karl Lallerstedt
Publisher: Springer International Publishing
Book: Organized Crime and Illicit Trade
Print ISBN: 978-3-319-72967-1

Electronic ISBN: 978-3-319-72968-8

Copyright Year: 2018
DOI: https://doi.org/10.1007/978-3-319-72968-8_4

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