- 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.
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
The EIU is the thought leadership, 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.
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.