Illicit trade: the criminal element and law enforcement

Trinidad and Tobago is a breeding ground for illicit trade activities, with its lucrative commercial market, unsuspecting consumers, and its under-resourced authorities who are left to determine what are illicitly traded goods and products. If these problems are addressed, then perhaps, this country can get an improved ranking in the next Global Illicit Trade Environment Index.

The index, produced by the Economist Intelligence Unit and commissioned by the Transnational Alliance to Combat Illicit Trade, was last published in 2018, and ranked TT as number 75 out of 84 countries. The index measures the extent to which economies enable (or inhibit) illicit trade through their policies and initiatives to combat illicit trade. It examines four main categories: government policy, supply and demand, transparency and trade, and the customs environment.

Illicit trade forms two parts, according to Roger Montero, managing director of Bastion Market Intelligence Ltd. The first part, according to him, is the most tangible and includes the trafficking of narcotics, humans, weapons, cigarettes, alcohol, wildlife and so on. The second and most intangible part, he said, is being carried out virtually, and is commonly known as cyber-attacks, where criminal elements hack into your computer or mobile systems and can hold you to ransom. This involves the use of malware, spyware and password hacking. Montero said, “It is becoming more and more pervasive.”

On the topic of brand ownership, Montero noted the majority of branded clothing which is being sold in TT is either counterfeit or being brought in as contraband, “Distributors are concerned with making money, and are not helping to increase awareness on illicitly traded goods – and that’s what they need to do. You will find products from Trinidad in other markets which were smuggled in as contraband, and even shipped back to Trinidad for resale.”

According to him, the reason this occurs is because when the product/good is manufactured in TT, the prices for each end market are different so people take advantage of that, and, goods are moved easily across the region. He said, “The contraband we are talking about is not just a couple of items here and there, but huge quantities.”

Montero cautioned regular online shoppers to err on the side of caution saying that there is a high percentage of illicitly traded goods on major well-known websites. He stated, “What the sellers do is send the items to these websites for verification, but when they receive an order and patch it through, it is the illegitimate product that is being sold. If it is not a product from the real manufacturer, then it is deemed illegal.”

As for whether you can purchase an item, for example, household items on online sites and re-sell it for a profit, he said once you pay your taxes it is not illicit trade, except in cases where it says the product is specifically manufactured for another country.

Montero added that is it impossible to stop smuggling in the country, unless we have an active compliance unit to go around and physically check.

Adding his views on the topic of illicit trade, president of the Downtown Owners and Merchants Association Gregory Aboud said if penalties and sanctions are to be applied to those involved in illicit trade it should come from an independent agency, free of political interference but with guaranteed funding. “The agency will not beholden to any political directorate, member of society, businessman, private sector group or NGO. It will be able to function independently and be measured based on their enforcement. Until that happens, enforcement is a moot and useless question,” he said.

He agreed that there is massive illicit trade taking place in the country with fake and counterfeit branding and this is particularly caused by Panama which is a great purveyor of fake products, and this poses a serious problem for the country. “This is a very serious problem for the consumer who is paying for an orange but is getting a grapefruit.” He said it also creates an unfair situation where those with established businesses and known brand products must face the scrutiny of the Bureau of Standards, while fake products are brought into the country with little or no oversight.

Aboud is also asking for a more level playing field when it comes to products on the commercial market and the normalisation of the economy. He noted that for far too long, there are those who benefited from not paying their taxes and it is destroying the economy. He stated, “The very businessmen who are contributing towards the tax revenue – that is giving money to government to do all of the things that it says it has to do – those businessmen are being eroded and corroded by this underground invisible trade, where a blind eye is turned to this so called parallel trade which gives non-traditional business people an opportunity to develop, and while no one is against giving these persons a chance to be entrepreneurs they never develop any sustainable skills. It is like allowing a person to have eleven players in a seven a side game, and the day that he has to play with seven players on equal terms he will never make it.”

The covid19 pandemic, he said, has brought our own economy into question, and Aboud predicts there will be a sharp decrease in local consumption, until the major economies like Europe and the United States reopen their businesses and trading. “We do not know for sure, but we can predict a tremendous fall in economic activity in the short and medium term.”

Based on these comments from Montero and Aboud, there is no doubt the covid19 pandemic will have profound effects on the world, most particularly organised crime and illicit trade. The early ramifications of the coronavirus have made our global economies increasingly susceptible, and some criminal groups are already using the restriction on movement as an “opportunity” to increase their illegal activities.

Illicit trade continues to deprive the Government of revenue collection efforts and pose serious health risks to consumers. Illicit trade affects all consumer goods and products such as clothes, makeup, alcohol, pharmaceuticals, fashion jewellery, food etc. This requires a collaborative effort with public and private sectors addressing the issue with key law enforcement authorities to develop methods to deal with the scourge of illicit trade.

TTMA’s Illicit Trade Desk was formed in 2018 as part of the organisation’s thrust to increase awareness and reduce instances of illicit trade activities in TT. The effects of illicit trade are numerous, including a loss of revenue to the Government, the provision of sub-standard goods, and the erosion of legitimate businesses (the latter effect affecting the jobs of many persons). TTMA recognises the adversities associated with illicit trade, and supports initiatives geared towards eradicating these activities in TT.

(Content courtesy TTMA)