Inside the dark world of illicit trade

It’s a dirty and dark industry and it’s rampant almost anywhere around the globe — from Manila to Madagascar, and anywhere in between. 

The bootlegged goods vary — from knocked off Guccis to fake medicines to smuggled cigarettes.  Indeed, counterfeit goods have become a multibillion dollar industry across the globe and it’s a shady business that operates in a vast and sophisticated criminal system. 

The situation is alarming and the Philippines isn’t spared, according to Crime Stoppers International, a Netherlands-based foundation that supports efforts to stop, solve and prevent the dirty trade.

The non-government organization has been working around the globe to fight illicit trade.

And banking on this successful, anti-illicit trade initiatives delivered in the Caribbean and South America, Crime Stoppers International is expanding its footprint and work program into Southeast Asia – commencing in the Philippines. 

Thus, in a recent forum held in Makati, experts discussed just how big the problem has become. 

There is enough anecdotal evidence to suggest the volume of counterfeit goods, drugs, weapons and other types of illicit trade moving across borders has been increasing and will continue to do so, it said.

“Governments across the globe are losing billions of dollars in tax revenues, legitimate businesses are being undermined, and consumers are suffering from unregulated, poorly made and inferior quality products, said Crime Stoppers International COO Devrol Dupigny. 

Experts said illicit trade is a threat to public health, the environment and tax revenues, and provides funds for transnational crime networks and terrorists. 

The last point is particularly alarming. It means that when we patronize fake goods, we are putting ourselves in danger because the money goes to terrorist organizations around the globe. 

Edmund Baranda, managing partner at law firm Baranda & Associates, explained the impact and implications of illicit trade in the Philippines.

He said that for consumers, buying fake products poses health risks. This can happen if we buy fake medicines. Smoking fake cigarettes worsens health risks even more because in some cases, the counterfeit manufacturers operate in unsanitary facilities and use materials that are mixed with God-knows-what. 

Herman Cheung, manager of illicit trade prevention at Philip Morris International, said that as the company also introduced smoke-free cigarette alternatives, they are worried that such products may also be faked by counterfeiters. 

For the government, Baranda said there’s fiscal loss because bootleggers don’t pay taxes. Health revenues are also compromised because cigarette taxes go to the health sector. There’s also increased criminal activities and greater instability, said Baranda. 

For industries, the negative impact is unfair competition and damaged brand image. It  goes for most products, not just cigarettes or alcohol. 

What can be done?

Crime Stoppers said it is important to increase engagement of key stakeholders and assist government in a concerted effort to tackle illicit trade and related crimes. 

It is also important to educate the public on the negative impact that illicit trade has on the economy and its linkages to terrorism. 

In the longer-term, it is also important to encourage the public to anonymously report illicit trade to Crime Stoppers, the organization said. 

Our law enforcement agencies must also improve their skills to improve the fight against illicit trade and related crimes such as money laundering, corruption and organized crime.

For consumer groups, there must be a change in the attitudes and behavior toward illicit trade and to stimulate an increase in reporting illicit activities, Crime Stoppers said. 

Crime Stoppers vows to continuously implement the technical infrastructure required to establish a highly trusted anonymous reporting platforms to support the intelligence gathering capabilities of the police and customs. 

The group is liaising with a broad range of public and private sector stakeholders in the Philippines, Hong Kong and Singapore, including international law enforcement agencies HM Revenue and Customs and Homeland Security Investigations, major brands Hewlett-Packard and Philip Morris, among others to help in the fight against illicit trade. 

I didn’t get to finish the forum, but I got enough to realize the enormity of the problem. 

One lesson really is to be careful not to buy fake products.  

Fake goods should not be a remedy or alternative to higher-priced, but original products. We should remember that when we patronize fake products, we not only become as phony as the bootlegged goods, but more importantly, we undermine our own security because we are helping fund global terrorism.