G L O B A L B R I E F I N G R E P O RT R E V I E W ILLICIT TRADE
Illicit Trade is a Global Risk the World Can’t Afford to Ignore By Jeff Hardy
Illicit trade is a major and growing policy challenge worldwide. From smuggling, counterfeiting and tax evasion, to the illegal sale or possession of goods, services, and wildlife, governments are losing billions in tax revenues, legitimate businesses are undermined, and consumers are exposed to poorly made and unregulated products. These crimes in turn are tied to human rights and labor rights violations, money laundering, illicit financial and arms flow, child labor, and environmental degradation. The World Economic Forum’s annual Global Risks Report lists illicit trade and the associated proliferation of illicit economic activity as a “global risk” with the potential to cause significant negative impact for several countries or industries within the next 10 years. For governments, illicit trade has an extensive destabilizing impact on global security due to its central role in facilitating transnational organized crime and illegal flows of money, people and products across borders. This in turn undermines the formal authority of rule of law, which can destabilize business and discourage investment. THE GROUP OF SEVEN The UK is taking on the Presidency of the G7 at a critical time for the world. While new vaccines offer a way to end the COVID-pandemic, the virus continues to wreak havoc across the globe and new variants threaten the global recovery. The pandemic has also allowed an unremitting illicit economy to expand and take root. Many factors shape the dynamics of illicit trade, from the international political and security landscape to macro socio-economic dynamics and national law enforcement capacity - all of which have been affected by the global COVID-19 pandemic. While the immediate effect was predictably to slow down all forms of economic activity, including the illicit, the COVID-19 pandemic spawned new markets for illicit trade, like falsified vaccines, and deepened age-old illicit trade in alcoholic beverages, tobacco and counterfeits. While initially set up as an informal forum for dialogue between leading
GROUPOFNATIONS.COM
72
