Anti-Illicit Trade & Supply Chain Security

Illicit Trade is a massive global problem comprised of smuggling, counterfeiting and local tax evasion. The global value of illicit trade is estimated to be worth $3 trillion – equal to 10% of world trade – yet international policy to deal with it is disparate.

Illicit trade is an international cross-border issue yet governments don’t work as effectively together across borders as the criminals do. Illicit trade undermines government health and fiscal objectives, it exposes consumers to unregulated product, it encourages widespread criminality, it funds organized crime and terrorism, it stifles innovation, it disrupts markets for suppliers, distributors & retailers, it undermines investment in distribution networks, it damages brand equity investment, and it undermines company and industry reputation.

There is no consistent international leadership considering public policy on illicit trade, just various international organizations dealing with various parts of the problem – enforcement, intellectual property rights, free trade zones, health, trade etc.  Effective addressing of the issue requires international co-operation between governments, industry and NGOs at all policy levels.  Whether the illicit trade is in wildlife, humans, cigarettes, nuclear parts, weapons, luxury goods, foods, or cosmetics – the same criminal networks are often involved. Different policy solutions may be necessary for source, transit and consumption markets.

As well as policy solutions, technology solutions are also needed. Business and industry need to protect their supply chains from illicit trade and there are hundreds of security devices and solutions on offer for tracking and tracing, authenticating or verifying products. Knowing what solution solves which problem (smuggling, counterfeit, tax evasion or a combination) is essential.

How do you ensure that law enforcement authorities know what overt security devices your company is using if they are detected at any point in the supply chain? What is the driver for action to deal with illicit trade?  Is it for the protection of government excise tax (tobacco, alcohol, petroleum)?  Is it for public safety (pharmaceuticals, cosmetics, food)? Is it for consumer confidence (organic supply chain, food, fashion)? Is it for corporate responsibility (all areas)?  Or is it for the protection of state resources? (Wildlife). There may be various rationales and perspectives but convergence is emerging in supply chain security.

JCIC can help you traverse both the policy and technology space relating to the global issue of illicit trade and supply chain security.  Jeannie Cameron currently co-chairs the OECD Taskforce on Charting the Illicit Trade in Environmentally Sensitive Goods and Wildlife.

Click here to read some of JCIC’s published articles on the topic.