OECD report highlights major weaknesses in global fight against illicit trade

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global fight against illicit trade

Governments around the world must act to improve global efforts to tackle illicit trade, according to a new report from the Organisation for Economic Co-operation and Development (OECD).

Published last week, the OECD’s Governance Frameworks to Counter Illicit Trade policy study highlights major weaknesses in the worldwide fight against illicit trade, including inconsistent and ineffective sanctions and penalties for smugglers and traffickers.

The report also criticises the insufficient monitoring of goods that pass through free trade zones, and a lack of screening of small parcels, which criminal networks are increasingly using to traffic prohibited and counterfeit goods worth many billions of dollars every year.

Outlining what it described as “a new phase in its efforts to help governments counter these enforcement gaps and better protect consumers and businesses”, the OECD study explains how the inconsistent implementation of policies and a lack of cross-border cooperation between governments is allowing organised criminal networks involved in the trafficking of illicit goods to avoid detection and punishment.

The report explains how the rise of ecommerce and the growth of postal and courier services that deliver goods ordered online has led to more illicit items being smuggled in small packages, which are harder for law enforcement agencies to detect than larger shipments.

It also notes how free trade zones, such as the EU’s Single Market, can act as safe havens for criminal networks looking to traffic illicit goods.

The report concludes that world governments can do more to fight the growth of illicit trade by working together to develop common solutions and by promoting effective governance frameworks.

“Globalisation and free trade are strong drivers of economic growth. They have also opened up new opportunities for illicit trade activities,” the report said.

“So far, the governments’ response to the risk of illicit trade has been largely uncoordinated and left many enforcement gaps that are easily exploited by criminal networks.”

Commenting on the release of the report, OECD Director of Public Governance Marcos Bonturi said: “Trade in fake and prohibited products can be dangerous for consumers and costly for companies and governments. This affects industries in all OECD countries and increasingly from emerging markets as well.

“Tackling policy gaps can start to increase the risks and lower the rewards of illicit trade for criminals.”

In a statement welcoming the report, anti-illicit trade group Tracit Director General Jeffrey Hardy said: “We fully support OECD’s efforts to upgrade institutional capacities and national government leadership to counter illicit trade.

“What is needed is a joined-up approach that leverages enforcement and governance measures and multiples the effectiveness of available resources across sectors and across borders. Tracit stands ready to support the OECD in its important work moving forward.”


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