How Covid-19 is proving a boon for criminal networks’ illicit trade, endangering international security

As the pandemic forces more people to go online for their needs, the black market trade – particularly in drugs, alcohol and tobacco – has boomed, causing untold harm to consumers and losing governments millions in critical revenue

David Luna

Published: 3:30am, 12 Aug, 2020

Why you can trust SCMP

While communities and economies around the world confront the lethal effects of Covid-19, another pandemic, in illicit trade, is similarly wreaking havoc on people’s safety and the security of nations.

Prior to the coronavirus, global illicit trade was already booming from an array of trafficking and smuggling crimes. Today’s global illicit markets generate trillions of dollars every year for transnational criminal organisations, complicit corrupt facilitators and other threat networks.

Profitable criminal activities include the trafficking of narcotics, opioids, arms, people, fake medicines, and counterfeit and pirated goods, food fraud, illegal tobacco and alcohol products, illegally harvested timber, wildlife, and fish, pillaged oil, diamonds, gold, natural resources and precious minerals, stolen antiquities, and other contraband.

They are sold on our streets, social media, online marketplaces and the dark web every hour of every day. This illicit trade converges with other crimes that help create a bigger threat. The reasons are clear: if criminals can make money, they will seize every opportunity to do so with no remorse for any harm or deaths caused by fake or tainted products.

Covid-19 has hastened illicit trade across the internet on thriving social media, e-commerce platforms and online marketplaces, alarming law enforcement and broader communities in many parts of the world.

01:22

Indonesia releases 25 green sea turtles rescued from illegal traffickers

Law enforcement agencies in Europe recently dismantled Encrochat, an illicit network using digital technologies and encryption to create a lucrative criminal marketplace that distributed illicit goods, laundered dirty money and hosted a message board for contract assassinations.

Before Covid-19, the expansion of internet shopping and cybercrime already presented a growing threat. A Red Points survey found that close to 73 per cent of US respondents will “further increase their online shopping compared to in-store if the Covid-19 outbreak continues”.

In recent months, Europol and Interpol have seized tens of millions of dollars’ worth of counterfeit medical supplies, fake food and illegal alcohol and tobacco products. This is disconcerting, given the hundreds of millions of counterfeit listings posted online daily, with sales of counterfeit goods projected to reach US$1.8 trillion this year.

In a 2018 report to the US Congress, the General Accounting Office found through one of its investigations that about 40 per cent of sampled goods bought on online platforms were fake counterfeits or otherwise fraudulent.

During the Covid-19 pandemic, the bootlegging, counterfeiting and smuggling of fake, tainted or counterfeited alcohol and tobacco products have been big business for criminals, as lockdowns and bans on excisable goods have cost governments hundreds of millions of dollars in lost revenue.

For example, a ban on cigarette sales in South Africa fuelled a black market that lost the finance ministry around US$2.2 million per day. Similar losses were seen in Malaysia and the Philippines, which have also had cigarette bans during lockdowns.

While parts of the illegal drug trade slowed as supply chains were hit during the initial Covid-19 outbreak, law enforcement agencies have since seen an uptick, with record-level confiscations of cocaine, heroin, methamphetamines and other illegal drugs.

Interestingly, cartels, mafias and gangs around the world have also organised “humanitarian” and goodwill Covid-19 operations to build political capital, influence and legitimacy, by providing jobs, medicines, food, hand sanitisers and usurious loans in affected communities. These actions will have consequences in a post Covid-19 world.

03:01

Brazil’s favela slums left to fight the coronavirus alone as Covid-19 spread continues in country

As a former diplomat helping the US strengthen international cooperation to combat transnational threats to global security, I learned that it is only by adopting multidisciplinary approaches, including through public-private partnerships and information-sharing across borders and sectors, that we can be most effective in combating illicit trade and breaking the corruptive power of criminal organisations and networks.

Fighting illicit trade will be even more critical as governments embark on economic recovery and recouping revenue lost to contraband and illicit trafficking becomes a higher priority. Police and security forces need to modernise, invest in new technologies, cooperate across borders, and focus more attention on cybercrime and e-commerce exploitation. Targeting money laundering and corruption should be top priorities.

We must confront today’s double whammy of transnational threats and Covid-19 crimes. These unprecedented times require greater leadership, innovation and partnerships in anticipating and addressing the geosecurity realities and converging cross-border criminal threats.

It is important to take a united global approach against illicit trade to help save as many lives as we can and make a positive difference.

David Luna, a former US diplomat and national security official, is president and CEO of Luna Global Networks, and currently chair of the OECD Anti-Illicit Trade Expert Group

Post