More consumer education and collaboration needed, argues new Economist Intelligence Unit study on the impact of covid-19 on illicit trade

• There
  will be at least five lasting effects from the pandemic, including rising
  demand for certain categories of illicit goods and an exacerbation of the
  e-commerce problem.
• Those
  effects can be addressed through various means, including improving consumer
  education, stronger public-private partnerships and more global collaboration.

ZURICH, SWITZERLAND -�Media OutReach - 20 October
2020 – Amidst the chaos created by the covid-19 pandemic and the
various policy responses designed to contain its spread, the usual loose
grouping of malicious opportunists is exploiting new vulnerabilities:
individual criminals, organised crime networks and international terrorist
organisations. Lasting
effects: How the covid-19 pandemic will change illicit trade, a report from The Economist Intelligence
Unit, supported by Philip Morris International, cover these and other related
issues, concluding with a series of recommendations for both the public and
private sector.  

The
five lasting effects

The first lasting effect is that the
pandemic is accelerating a long-term shift in demand for certain commodities.
The economic impact on employment, earnings and disposable incomes around the
world will force consumers to look for cheaper alternatives, increasing demand
for counterfeits and other illicit products.

The second effect is that the new markets
for illicit goods are here to stay. Even if export controls on personal
protective equipment (PPE) are eased, for example, the damage has been done–once
criminals introduce new products into illicit markets, they find a way to stay.

The third effect is another acceleration of
an existing trend: the shift to e-commerce platforms. E-commerce was already
providing a strong sales channel before the pandemic. Now, with the increased
volumes of goods being ordered on-line for citizens around the world stuck at
home due to lockdowns, criminals have even more cover to sell their goods.

The fourth lasting effect is on delivery
routes and supply chains. Supply chain disruptions can affect illicit traders
just as much as they do their counterparts in licit trade. It also created new
opportunities, particularly as customs organisations have become overwhelmed by
volume of small parcels and as governments seek to fast-track shipments related
to the fight against the pandemic.

The fifth and final effect concerns
wildlife trafficking. Whatever the means of transmission, the covid-19 is
widely-agreed to be zoonotic in origin. There is hope that this will finally
compel countries at the centre of the trade, whether on the supply or demand
side, to take action.

Recommendations.
Trends gathered from
studies and expert interviews so far point to critical long-term impacts of the
pandemic on illicit trade. The report concludes with three key recommendations.

• Improve
  consumer education.
  Consumers need to be made aware of the impact of their choices. Education
  campaigns are one of the best hopes for changing behaviours before they become
  ingrained.
• Establish
  stronger public-private partnerships. This includes areas such as intelligence gathering
  and sharing and addressing new challenges such as cyber-crime. Better
  collaboration can help stretch limited resources when budgets tighten, as they
  have during the pandemic.
• Make
  global calls to collaborate.
  Collaboration on tackling existing illicit trade as well as coordination to
  prevent the expansion of illicit trade markets created during the pandemic will
  be key.

 

Chris Clague, the editor of the report,
says: “The pandemic has provided new opportunities for organised crime networks
and international terrorist networks on which they wasted no time capitalising.
Law enforcement and the private sector will fall further behind if they don’t
at the same improve their efforts to collaborate and develop closer
partnerships to combat the trade.”

About The Economist Intelligence Unit

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research and analysis division of The Economist Group and the world leader in
global business intelligence for executives. We uncover novel and
forward-looking perspectives with access to over 650 expert analysts and
editors across 200 countries worldwide. More information can be found on www.eiuperspectives.economist.com.
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About Philip Morris International

Philip Morris International (PMI) is leading a
transformation in the tobacco industry to create a smoke-free future and
ultimately replace cigarettes with smoke-free products to the benefit of adults
who would otherwise continue to smoke, society, the company, and its
shareholders. PMI is a leading international tobacco company engaged in the
manufacture and sale of cigarettes, as well as smoke-free products and
associated electronic devices and accessories, and other nicotine-containing
products in markets outside the United States. PMI ships a version of its
smoke-free devices and consumables authorized by the U.S. Food and Drug
Administration to Altria Group, Inc. for sale in the United States under
license. PMI is building a future on a new category of smoke-free products
that, while not risk-free, are a much better choice than continuing to smoke.
Through multidisciplinary capabilities in product development, state-of-the-art
facilities, and scientific substantiation, PMI aims to ensure that its smoke-free
products meet adult consumer preferences and rigorous regulatory requirements.
For more information, please visit www.pmi.com.