By The Transnational Alliance to Combat Illicit Trade

One of the key underlying conditions that makes countries more vulnerable to illicit trade is corruption, which erodes controls designed to prohibit illegal goods to move across borders, undermines law enforcement operations to detect or interrupt illicit trade, and contributes to impunity of illicit traders. 

A new report from the Transnational Alliance to Combat Illicit Trade (TRACIT) - Money Talks: The Crooked Connection Between Corruption and Illicit Trade - finds that corruption is affecting illicit trade worldwide. There is not a single sector of illicit trade that is not tainted by corruption, including agrifoods, alcohol, IUU fishing, forced labor, timber, or wildlife, pharmaceuticals, pesticides, precious metals, gemstones, tobacco products, petroleum, or counterfeiting. 

Examples of when corruption is encountered during illicit trading include when:

• Border agents and customs officials facilitate the movement of illicit goods.

• Law enforcement officials fail to report or investigate illegal operations, prevent arrests or release suspects.

• Government officials facilitate the fraudulent issuance of permits and licenses, allow quotas to be exceeded or interfere with regulatory inspections.

• Officials involved in the criminal justice process help evidence disappear during prosecutions, delay or drop prosecutions, or to return no convictions in the cases of those who are brought to trial.

• Furthermore, there is a robust correlation between corruption (as measured by Transparency International’s CPI) and illicit trade (as measured by the EIU’s Global Illicit Trade Environment Index).

The report finds that any successful steps to mitigate illicit trade will necessarily require strong and targeted measures to mitigate corruption and prevent corrupt actors from compromising the integrity of the global supply chain.

Based on the findings of the report, TRACIT has formulated a set of policy recommendations aimed at facilitating an effective response to corruption in the context of illicit trade. These recommendations provide a “checklist” of fundamental measures that governments are encouraged to implement to improve their ability to defend against the wider societal harms of illicit trade, with a particular emphasis on addressing the enabling role of corruption in perpetuating illicit supply chains.

New York: TRACIT, 2024. 72p.