Biden’s foreign policy shift should address cross-border corruption and illicit trade
- Corruption and illicit trade are threat multipliers that ripple across borders and imperil democratic freedoms and institutions
- By advancing a national security strategy to tackle these two problems, Biden can work with allies and through public-private partnerships internationally
Corruption corrodes the underpinnings of good governance, clean markets and supply chain security. It impedes progress on human rights and implementation of national sustainability strategies. The reality is that both corruption and illicit trade are threat multipliers that ripple across borders and imperil democratic freedoms, and systems of open, free and just societies.
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Illicit trade further hampers economic development by preventing the equitable distribution of resources that provide for sustainable growth. It enables kleptocrats to pillage their countries, criminal organisations to co-opt states and export violence, and terrorist groups to finance their attacks against our communities.
Illicit trade, which includes a convergence of numerous trafficking, smuggling, financial, cyber and fraud crimes, is fuelling a multi-trillion-dollar illegal economy globally every year. The trafficking of narcotics, opioids, weapons, people, counterfeit and pirated goods, and other contraband further corrodes the rule of law and undermines social stability and the welfare of our communities.
An estimated 3 per cent of global GDP, or US$2.2 trillion, is lost annually due to illicit trade leakages. While Covid-19 has brought economic malaise to most sectors, the illicit economy continues to thrive. This is especially true across e-commerce marketplaces that are generating tremendous prosperity for bad actors, diverting critical revenue for governments.
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Similarly, countries like South Africa, Malaysia, the Philippines and Mexico which banned alcohol, tobacco or certain food products during the pandemic have seen more problems than benefits. Such bans have resulted in a boom for the illicit trade in alcohol, cigarettes and food that was falsely labelled as medicinal cures, providing more opportunities for organised criminals to exploit.
Biden must elevate the fight against kleptocracy and illicit trade globally. His administration should first begin by aggressively implementing the Corporate Transparency Act to end the abuse of anonymous companies by criminals to finance their criminal activities.
Breaking the corruptive power of these malign actors, and stripping them of their illicit wealth, can end their impunity and expose their nefarious activities.
The US must also ramp up coordinated law enforcement efforts against criminals through greater investigation and prosecution across source, transit and demand markets, and by leveraging international instruments, such as UN conventions against transnational organised crime and against corruption.
A firm commitment by Biden to prosecute the twin devils of kleptocracy and illicit trade would be welcomed, as is a forward-looking foreign policy that advances the greater good, democratic values and collaborative partnerships that help keep our community of democracies more prosperous, secure and safe.
David M. Luna, a former US diplomat and chair of the OECD’s Anti-Illicit Trade Expert Group, is a senior national security fellow in the Terrorism, Transnational Crime and Corruption Centre at George Mason University