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Combating illicit trade in Asia

Pandemic has further exposed weaknesses throughout the region and in the online world that allow shady operators to thrive - Article from Jan 18th Bangkok Post


Not only has the Covid-19 pandemic exposed flaws in social and health systems, disrupted supply chains and taken at least 38,000 lives across Southeast Asia, it has also shed light on the growing problem of illicit trade in the region.


Smuggling, counterfeiting and related illegal activities rob the global economy of US$2.2 trillion annually, with trade in counterfeit goods accounting for $461 billion. In Asean, the counterfeit goods market was worth $35.9 billion in 2018, according to a paper published by the EU-Asean Business Council (EU-ABC).


"It is estimated that Asean's counterfeit market contributes close to 10% of the international trade in these goods," noted Chris Humphrey, executive director of the EU-ABC. "There is no doubt that if left unchecked, this illegal industry will grow, at a time when we are faced with an unprecedented health and economic crisis.

"Counterfeiters and smugglers are known to exploit systemic weaknesses and Asean leaders need to see the urgency to coordinate and collaborate to combat against this transboundary issue."


A report titled "Illicit Trade in a Time of Crisis", published by the Organisation for Economic Cooperation and Development (OECD), provides an update on how the illicit trade landscape has been affected by the Covid crisis, with potentially long-lasting implications.


In the short term, unmet demand for pharmaceuticals and personal protective gear caused flows of fake and substandard medicines, counterfeit face masks and test kits into the legitimate supply chain, posing threats to public health and safety.


When the World Health Organisation (WHO) declared the coronavirus a pandemic, Operation Pangea, Interpol's global pharmaceutical crime-fighting unit, made 121 arrests across 90 countries in a single week in March 2020. The "week of action" resulted in the closure of more than 2,500 web links, including websites, social media pages, online marketplaces and online advertisements for illicit pharmaceuticals with a combined value of $14 million.


Labour shortages, lockdowns and shifting priorities in government agencies, especially customs and law enforcement, together with global transport restrictions, are also having an impact on trade patterns. This will push more illicit trade into areas such as free trade zones (FTZs), the report warned.


Criminal networks are also targeting online channels as more people stay home. E-commerce has become the main platform for counterfeit products including Covid-19 related medicines, face masks and other goods.

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