Unorthodox Illicit Financing

The global illicit trade and financing market is worth hundreds of billions of dollars, with smugglers and financiers engaging in unorthodox illicit dealings with goods like cigarettes and medicine. Several global initiatives have tried to stem the growing trend of illicit trade and financing to protect legitimate businesses and customers. Listen as we analyze a few case studies of illicit trade and discuss international efforts to combat these practices.

What is Illicit Trade and Financing?

The Organisation for Economic Co-operation and Development (OECD) defines illicit trade as a practice that “involves goods & services that are deemed illegal as they threaten communities and society as a whole.” Illicit finance similarly is the practice of illegal financing that threatens communities and societies. A 2016 OECD report found that imports of counterfeit and pirated goods are worth nearly $500 billion every year.

These industries have expanded in recent years, with increasing interconnectedness of global supply chains and ease of engaging in illicit global trade and finance through illegal websites.

Case Studies: Cigarettes and Medicine

While criminals are taking advantage of a variety of goods and services to engage in illicit trade and finance, two illicit industries that have large revenues and global reach are cigarettes and medicine.

Billions of illicit cigarettes are consumed each year. In 2014, an estimated 1 billion illicit cigarettes were consumed in Asia, while an estimated 53 billion were consumed in the EU in 2015. A key producer and trader of illicit cigarettes is North Korea. Terrorist organizations have also profited from this illegal trade.

Illicit counterfeit medicine sales has been an issue permeating global markets for decades. In 2010, the World Health Organization ( WHO) estimated that counterfeit medicines sales were approximately $75 billion this year, a 90% rise in five years. This problem continues, especially in developing countries that have less government oversight.

Efforts to Combat Illicit Trade and Financing

Global and local law enforcement organizations have collaborated to disrupt these illicit operations. For example, in 2009, International Criminal Police Organization (Interpol) seized 20 million pills, bottles and sachets of counterfeit and illegal medicines across China and seven of its south-east Asian neighbours. Moreover, non-profit organizations like the AntiCounterfeiting Coalition Inc. and local partners have ongoing initiatives to mitigate the effects of illicit trade and financing

Dig Deeper

Take a look at some of our favorite articles that we came across while researching this topic:

Global trade in fake goods worth nearly half a trillion dollars a year – OECD & EUIPO, OECD

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