Illicit Trade Research Articles

Estimating the price elasticity of demand for cigarettes in South Africa using the Deaton approach

ObjectiveTo estimate the price elasticity of demand for South Africa and thereby contribute to growing the evidence base of the likely impact of excise taxes on cigarette demand in low-income...

Counterfeiting: Exploring mitigation capabilities and resilience in South African pharmaceutical supply chains

Orientation: Pharmaceutical supply chains (SCs) are experiencing a growing emergence of illicit trade of counterfeited products. This threat is amplified because of global distributed SC networks, increased access to the Internet and challenging economic conditions.Research purpose: The purpose of this study was to explore risk mitigation capabilities and SC resilience (SCRES) to reduce the effects of counterfeiting in the South African pharmaceutical industry.Motivation for the study: Developing countries such as South Africa tend to be more vulnerable to counterfeiting, as these countries do not have established responses that are seen in more developed countries, such as SC regulation, track-and-trace technology and enforcement regimes.Research design, approach and method: This study employed a generic qualitative research design. Semi-structured interviews were used to collect data from 12 pharmaceutical manufacturers, distributors and retailers in the South African pharmaceutical industry. A thematic analysis approach was followed to analyse the collected data.Main findings: The findings show that the sources of counterfeiting stem from the local and outsourced manufacturing of counterfeited products, presence of unauthorised distributors and importing of counterfeit products. Risk awareness can be enhanced by collaborating with industry members, training members to identify counterfeits and by developing authentication technologies. The industry actively combats counterfeiting by using SCRES enablers including visibility, collaboration, information sharing and by developing an SC risk management culture.Practical/managerial implications: South African pharmaceutical firms have limited resilience. Therefore, managers should develop flexibility, agility, sensing and redundancy as resilience enables firms to combat counterfeiting.Contribution/value-add: This study expands the current literature by identifying the unique sources of counterfeiting and risk mitigation capabilities to combat counterfeiting in pharmaceutical firms in a developing country context.

Brand-switching and tobacco taxation in Vietnam

BackgroundThe government of Vietnam is embarking on a radical tobacco excise tax reform, switching from the current pure ad valorem scheme to a mixed system by adding a specific component....

Measuring the capacity to combat illicit tobacco trade in 160 countries

BackgroundIllicit trade of tobacco negatively affects countries’ tobacco control efforts. It leads to lower tobacco prices and makes tobacco products more accessible to vulnerable populations. In this study, we constructed an illicit tobacco trade index, which measures the structural and institutional capabilities of 160 countries in addressing illicit tobacco trade. We collected the most recent and best available data on general governance, tobacco control policies, and trade and customs practices.ResultsSingapore, New Zealand, Finland and Sweden lead countries with the most favorable illicit tobacco trade score. We observed a positive relationship between illicit tobacco trade scores and Gross National Income (GNI) per capita and a negative relationship with the share of illicit tobacco trade to total tobacco consumption.ConclusionsThe capability to combat illicit trade varies across countries. However, on average, low and middle-income countries (LMICs) are less capable of addressing illicit tobacco trade as suggested by the lower illicit tobacco trade index score. The lower index score in low and middle-income countries was mainly driven by low scores in tobacco control policies and trade and customs practices and conditions. Our study reinforces the importance for LMICs to adopt the WHO’s Protocol to Eliminate Illicit Tobacco Trade Products, particularly committing to treaty obligations and investing on track and trace system and other customs reforms.

Why There is Still an Illicit Trade in Cultural Objects and What We Can Do About It

ABSTRACT Fifty years after the adoption of the 1970 UNESCO Convention, the illicit trade in cultural objects endures, with harmful consequences to local communities, knowledge acquisition, and archaeological landscapes and objects. In this article, we present a gap analysis to assess under-performing policy and practice. We argue that a poor understanding of how the trade is organized and operates and of how it might be regulated hinders effective policy formulation. Funding structures which encourage short-term ad hoc research and inhibit information sharing are in part responsible for some of the gaps. We conclude by suggesting how sustained theoretically informed, evidence-led collaborative analyses might help reduce or mitigate these problems, preventing another 50 years of illicit trade.

The relative effectiveness of law enforcement policies aimed at reducing illegal trade: Evidence from laboratory markets.

Despite recent emphasis and implementation of national and international anti-money laundering policies, illegal product markets, and their associated illicit profit remain a global problem. In addition to law enforcement aimed at reducing money-laundering, enforcement also takes place during (1) the production (e.g. crop eradication) and (2) sale (e.g. seizure of products during transportation that interrupts buyer and seller transactions) of the illegal product. Since funds for enforcement come from limited budgets, understanding where in this production-trade-laundering cycle law enforcement is most impactful becomes a global question. Using laboratory experimental markets and a seizure rate of 20%, we find that law enforcement focused on seizing laundered profits does little to reduce illegal market activity when compared to no law enforcement, suggesting that focusing law enforcement on money laundering will likely be ineffective at reducing crime. Results further show the amount of illicit trade is nearly 32% lower when law enforcement is focused at the point of sale, and there may be additional economic incentives that reduce illicit trade in the long run when compared to no law enforcement. Enforcement at the point of production also reduces market activity, but not as effectively as enforcement at the point of sale. Lastly, the empirical findings deviate from equilibrium predictions, suggesting law enforcement policy based on theory alone may lead to inefficient allocation of limited law enforcement resources.

New evidence of illicit cigarette consumption and government revenue loss in Indonesia.

INTRODUCTIONIllicit cigarettes because of their affordability could increase smoking prevalence, especially among young people. They also cause a large revenue loss for the government. This study aims to estimate illicit cigarette consumption and government revenue loss in Indonesia, a country with a very high smoking prevalence, especially among males.METHODSWe estimated illicit cigarette trade in terms of volume and revenue loss. Illicit trade was estimated as the discrepancy between legal cigarette sales and domestic consumption recorded by national representative surveys. Data sources included Basic Health Research Survey, Global Adult Tobacco Survey, National Socioeconomic Survey, and data from Ministry of Finance.RESULTSWe found that illicit cigarette consumption fluctuated from 19 billion sticks in 2007 to 14 billion sticks in 2013, and sharply increased to 59 billion sticks in 2018. Relative to cigarette consumption, illicit cigarettes were the lowest at 5% in 2013 and highest at 19% of consumption in 2018 (assuming 0% underreporting). The estimated government revenue loss ranged from IDR 24.2 to 42.0 trillion (US$ 1668 to 2897 million), which corresponds to 15.8% to 27.5% of cigarette excise revenue in 2018.CONCLUSIONSIn Indonesia, illicit cigarette consumption was found to be high and increasing, which contributed to a large government revenue loss (almost onethird of tobacco excise tax revenue). To reduce illegal cigarette production and smuggling, the government should increase resources to enforce the regulation on the excise tax system including stronger penalties, especially related to illicit cigarette production.

Islanders and Empire: Smuggling and Political Defiance in Hispaniola, 1580–1690

Historians' interest in the seventeenth-century Caribbean has surged in recent years. Juan José Ponce Vázquez's revised dissertation analyzes the role that smuggling played in the cultural, economic, and sociopolitical development of Santo Domingo from the end of the sixteenth to the late seventeenth century. The author focuses on local communities that reflect shifting opportunities for the population during a period when hostile powers penetrated parts of the Spanish empire, including the island of Hispaniola, and established their own colonies in the Caribbean.Based on extensive research in the Archivo General de Indias, Ponce Vázquez shows that the development of plantation economies was not the only viable option for settlers in colonies neglected by the Spanish crown's preference for resource-rich parts of the New World. Some people found other means of survival, and the reason that Hispaniola trod a different path was its access to the lucrative contraband economy. Illicit trade, as it turned out, generated income for a substantial portion of the island's population. The author convincingly demonstrates that the colony was not lingering on the periphery of the Caribbean, as it has long been depicted, but was an active participant in the Atlantic economy that transcended the mercantilistic policies of the European rulers.The book is organized in chronological order. The first chapter covers most of the sixteenth century, when Hispaniola evolved from the center of Spanish imperial expansion to an impoverished backwater with limited opportunity for its inhabitants. In chapter 2 Ponce Vázquez describes how smuggling emerged as the predominant sector in the island's economy toward the end of the century. Contraband trade with Dutch merchants flourished, and many settlers profited from this form of commerce. The third chapter outlines the well-known forced depopulation between 1604 and 1606 that left large parts of the island's north and west open to foreign intrusion. The author then examines how Santo Domingo's inhabitants consolidated control over colonial government and forged new relationships with non-Spaniards and the authorities in the motherland. The focus on Rodrigo Pimentel's remarkable career as officeholder and ruthless businessman in the next chapter provides fine insights into the political culture of this neglected colony. The final chapter considers the relations with intruders, particularly the French who, beginning in Tortuga in 1629, seized the western coastal regions of the island and established the colony Saint-Domingue at a time when the Spanish crown barely managed to protect major Caribbean ports from foreign assaults.The surviving sources do not seem to be as rich as for other Spanish colonies like Mexico or perhaps Panama, but Ponce Vázquez paints a vivid picture of the development of Santo Domingo from the failure of plantation economy to the war against the French in 1690. The descriptions of the social and cultural implications of the reliance on illicit trade belong to the great strengths of this book. The author shows how the cabildo (governing council) became a “select club where friendships were established, profitable deals were struck, but also where members could become life-long enemies” (p. 144). While the local elites used the power of political office for their own advantage, the dirty work was often carried out by slaves. A few examples make the stories of various individuals come alive as well as further contribute to a better understanding of colonial society.Although this book covers much new territory, for historians of the Atlantic world the crucial intersection with the French remains a bit of a mystery. The author, for instance, describes a number of raids and counterraids in the 1660s and 1670s, but it is not clear whether there was any peaceful trade between these parties during this period. The lack of references in the Spanish correspondence is a major roadblock. Some papers in French archives suggest that merchants from Normandy specifically sought customers among the island's Spanish settlers. The potential profits seem to have outweighed the risks. The French and the Dutch sides of these illicit transactions wait to be explored in future research projects.In sum, Ponce Vázquez's work is an important contribution to the growing body of studies of smuggling and contraband trade in various parts of the Spanish empire. This excellent book is rich in detail and illuminates Hispaniola's history during a crucial phase of development. The author has done a fantastic job in bringing the many facets of colonial life outside the centers of prosperity to light. It is regrettable that the exorbitant price will severely limit the readership. Not only historians of Latin America and the Caribbean but also a broad audience with a more general interest could profit from the wider distribution of this study.

Analysis of submissions to the EU’s public consultation on tobacco traceability and security features

BackgroundThe Protocol to Eliminate Illicit Trade in Tobacco Products requires all parties to establish a tobacco track and trace (T&T) system. In 2016, the European Commission held a public consultation...

Banning Loose Cigarettes and Other Tobacco Products in India: A Policy Analysis.

Sale of single cigarettes (also known as singles or loosies) is a key driver for early initiation of smoking and is a leading contributor to the smoking epidemic in India. Sale of singles additionally deter implementation of tobacco control strategies of pictorial health warnings including plain packaging and defeat effective taxation and promote illicit trade. We review India's tobacco control policy responses towards banning singles and other products sold as loose tobacco and identify opportunities for future policy intervention especially in the context of the ongoing COVID-19 pandemic. Existing national and sub-national policy documents were analyzed for their content since the inception of the tobacco control laws in the country. There are no effective provisions at national level to ban loose tobacco products in India. However, the implementation of multiple legislative and regulatory measures (Acts/circulars/letters/notifications/orders/court judgements) in 16 Indian states and jurisdictions provide sufficient legal framework to substantiate its complete ban pan India. While the majority of state governments have adopted state level measures, Rajasthan had issued specific directive to all the 33 districts banning loose cigarettes and other tobacco products. Himachal Pradesh introduced the most unique and comprehensive legislation, for banning the sale of cigarettes and beedis (Dated November 7, 2016). The most recent notification in the state of Maharashtra (September 24, 2020) is the first to leverage powers using a mix of national and state legislations including the legislation addressing the rapidly emerging challenge of managing COVID-19. A robust national policy which supports strong provision to deter tobacco companies, their distribution network and vendors from selling singles or loose tobacco products is urgently needed. Such policy should be backed by cautionary messaging for consumers as well. Eliminating singles and loose tobacco sale will help in blunting tobacco use prevalence besides curbing spread of infectious diseases like COVID-19 pandemic.

Regulating Alcohol: Strategies Used by Actors to Influence COVID-19 Related Alcohol Bans in South Africa.

South Africa has used intermittent alcohol prohibitions and restrictions as a strategy to relieve hospitals of alcohol-related trauma cases and spare services for COVID-19 caseloads. Alcohol regulation is highly contested and involves a diverse range of actors who influence policies to align with their interests. This study sought to examine the strategies used by these actors to shape the COVID-19 related alcohol regulation in South Africa as presented by online news media. We found that the voice of pro-regulation actors is smaller and fragmented compared to opponents of the regulation as each actor seeks to advance their own interests. Despite the regulations initially being framed as a COVID-19 public health measure, pro-regulation government ministries, such as police and transport, perceive the regulations as a way of reducing existing (pre-pandemic) alcohol-related harm, such as crime, road-traffic injuries, and gender-based violence. The pre-existing failures in the alcohol regulatory environment and the current policy momentum created by COVID-19 could present an opportunity to retain components of the new laws and improve alcohol regulation in South Africa. However, there is a dominant and cohesive alcohol industry voice that strongly opposes the regulations, citing economic impacts, illicit trade and lack of evidence on the positive effects of the alcohol bans. Strategies employed by industry include lobbying, framing, and litigation. The regulations implemented under the guise of COVID-19 prevention have presented valuable lessons for alcohol regulation more generally. However, whether these regulations translate to sustainable policy changes will depend upon how and if the strong industry voice is countered.

Bride Trafficking in India: Aspects, Causes and Potential Solutions

Bride Trafficking is a long-standing evil in society that can be classified as a crime against humanity because it violates the rights, dignity and the liberty of the victims involved. Bride Trafficking is so deep rooted in society that providing accurate figures is extremely difficult since it is often impossible to track down and trace individual incidents of Bride Trafficking. According to the author, who has conducted a case study with fifty women from the State of Haryana, inter-country trafficking for the purpose of marriage is widespread in India. Trafficked women are subjected to a slew of atrocities, including being raped in transit and then raped by their husbands and other male family members. Apart from that, they face domestic violence, are treated worse than slaves and are frequently trafficked multiple times. Poverty, female foeticide, female infanticide, illiteracy, dowry and other factors can all contribute to trafficking. In this paper, the author will discuss Bride Trafficking in general, the reasons for it, the human rights violations that these trafficked brides face and the potential solutions to this illicit trade.

ARMED BANDITRY AND BORDER MONITORING: CHALLENGES FOR NIGERIA’S SECURITY, PEACE AND SUSTAINABLE DEVELOPMENT

The greatest challenge facing Nigeria today is international terrorism that is aided by religious extremism, porosity of borderline and cross-border security challenges and crime. Indeed, the existence of porous borders and cross-border and frontier activities in Nigeria has aided crimes and security challenges across Nigerian borders for long without any specific solutions. This paper examines the security challenges and the socio-economic effects of insurgency and armed banditry in Nigeria. The country as a nation state is under a severe internal socio economic and security threat. At a more general level, the threat has social, economic, political and environmental dimensions. Each of these dimensions has greatly affected the nation’s stability, and can be traced to the ethnic militia armies, ethnic and religious conflicts, poverty, terrorism, armed robbery, corruption, economic sabotage and environmental degradation. The efforts of the government to eradicate insurgency, banditry and corruption have been slow and costly in terms of public funds spent, lives and properties lost. This has made the citizenry to question, the efficiency of the menace. Using frustration-aggression theory, the paper then revealed that the major criminal activities in Nigeria borders are smuggling of contraband goods and illegal immigrants, trafficking in weapons and human parts, drug trafficking, vehicle crime, trafficking of illegally exploited natural resources, including the illicit trade in timber, oil and diamond among others. This growth and flourishing entry without proper check or monitoring, has brought about insurgency, armed banditry, kidnapping and corruption, etc. which has become a problem of security as a result of these borderless-borders in Nigeria, with armed banditry becoming one of the most intractable challenges facing the country today. There are many speculations that the groups may have found their way through our porous borders. Therefore, the study probes into the nature of Nigeria borders using Historical/descriptive method of research and analysis in Armed Banditry and Border Monitoring: Challenges for Nigeria’s Security, Peace and Sustainable Development. The study data were collected through documentation of secondary sources, including review of related literature journals and write-ups even as it built on the findings of already existing works about emerging security threats in Nigeria. The study is concluded by recommending among others that the country should evolve a sustainable social security system which will discourage public office holders from engaging in corruption, with good information sharing techniques providing gainful employment opportunities for the citizenry, etc.
 
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Tendencies and limitations on increasing excise tax on cigarettes in EU member states

The recent studies of levying excise tax on cigarettes and the policy of the EU and its member states aimed at setting a minimum excise tax thereon have been analyzed in order to substantiate recommendations on the respective reform in Ukraine. The article confirms findings that a sharp increase in the excise tax (high excise rates) lead to the growth of illicit trade in such products. For that reason, when initiating corresponding changes to legislation, it is essential to choose such pace of increase in tax rates that would take into account the purchasing power and the level of such rates in neighboring countries. Even severe tax control measures may turn out to be inefficient if there are any conditions for getting high profits from the illicit market. Achieving excise revenue growth without fiscal losses due to the increase in illicit tobacco trade is possible only through a gradual increase in tax rates. It has been established that the negative experience of a number of the new EU countries in reaching the EU minimum excise tax on cigarettes should be taken into consideration while designing future pan-European legislative changes to avoid decisions that would either set out too high target thresholds or disregard the need to provide a sufficient transition period to achieve them. Today significant differences persist in the levels of purchasing power in the member states and there are still opportunities for smuggling cigarettes into the EU through its eastern borders. Given this, several post-socialist EU countries remain vulnerable to new increases in the minimum excise tax on cigarettes and are unlikely to agree on legislative changes that set forth “jumps” in the excise tax rates or their significant growth in the coming years. It has also been demonstrated that most EU countries have abstained from raising cigarette excise tax significantly during the COVID crisis for fear of the illicit trade growth. It has been proven that Ukraine should review the current plan on increasing cigarette excise tax by slowing down the tax growth and extending the plan till 2028.

Introduction Special Issue: Environmental Impacts of Illicit Economies

For decades, illicit economies have predominantly been studied and debated as a security problem with social and development consequences. However, the interaction between illicit economies and the environment, in cases such as illicit drug crop cultivation and drugs production, is more recent and a rather unexplored discussion– despite that it is not a new phenomenon. From an environmental standpoint, illicit economies can lead to a broad array of negative impacts, with complex interactions. This Special Issue of the Journal of illicit Economies and Development seeks to enhance the evidence basis and understanding of the environmental impacts of illicit economies beyond traditional crime-focused indicators. The special issue pursues to shed more light on the manifold interlinkages between illicit economies and the environment, contributing to a growing body of research of a rather young branch of research in the field of illicit economies. The special issue gathers a broad array of phenomena, perspectives, and disciplines, combining original research and policy considerations. The Special Issue includes contributions on the environmental impacts of illicit drug crop cultivation, drug trafficking, drug production, illicit trade in bushmeat and wildlife in general, land grabbing and illicit sand mining, covering a broad range of regions and continents.

Sanction Avoidance and the Illegal Wildlife Trade: A Case Study of an Urban Wild Meat Supply Chain

The unprecedented global scale of illegal wildlife trade poses threats to humans and ecosystems. Policies calling for increased enforcement to control illicit trade are rooted in the idea that more enforcement will result in greater deterrence, but as yet it is unclear how the illegal wildlife supply chain responds to enforcement actions. To evaluate the impact of formal or informal deterrence, it may be pertinent to consider strategies used by illicit networks to avoid sanction threats. Using an exploratory case study on urban wild meat trade (Republic of Congo), we describe some of the strategies used to avoid detection and consider how the concept of restrictive deterrence can be used to advance our understanding of the broader impacts of sanction threats on offender decision-making in illegal wildlife supply chains.

Efforts to curb the proliferation of small arms and light weapons: from persistent crisis to norm failure?

More than 20 years since its negotiation in 2001, the UN Program of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects (UNPoA) is failing to fulfill the expectations of states and civil society alike. Considering the absolute numbers of military and civilian possession, the aim of tackling the illicit proliferation of small arms and light weapons (SALW) in “all its aspects” is currently likely to fail. Studies show that civilian ownership has increased dramatically since 2006. The estimated stocks of SALW in sub-Saharan Africa are 11 million state-owned SALW and 40 million SALW in the hands of civilians. Legal arms exports between states remain another source. This article seeks to identify the different facets of the continuous crisis of SALW control by relying on a global governance perspective as well as on norm research in international relations. The sources of illicit SALW proliferation are manifold and often exceed the capabilities of arms control and disarmament. The present article focuses on the external and internal dimensions for the crisis of illicit SALW proliferation. However, when looking at the internal dimension of the SALW crisis, the UNPoA itself is also partly to blame for the inadequate and ineffective arms control and disarmament efforts. This gloomy picture is exacerbated by statistics indicating that the numbers of newly manufactured SALW are still growing more rapidly than worldwide disarmament efforts. It is more important than ever to ensure that prescriptive norms are translated into everyday practical political and social realities to meet the needs of people struggling with the dire consequences of illicit SALW proliferation.

Turning a threat into an opportunity: British American Tobacco’s weakening of the Protocol to Eliminate Illicit Trade in Tobacco Products

BackgroundPrevious research has outlined transnational tobacco company (TTC) efforts to undermine implementation of the Protocol to Eliminate Illicit Trade in Tobacco Products (Protocol) and evidence of ongoing TTC complicity in...

Experiences of the Hungarian criminal jurisdiction concerning the illicit trafficking of cultural properties

PurposeThe special purpose of this research was to identify the current features of illicit trade of cultural properties in Hungary and the procedures dealing with it. These offences pose a significant risk of damage to cultural property and have a strong link with organised crime. This relationship underlines the need for a criminal law approach worldwide in the field of the protection of cultural goods.Design/methodology/approachTo explore the current situation in Hungary, an empirical research was conducted in 2018 with questionnaires designed to obtain data from the criminal records. To examine the phenomenon of “illicit trafficking”, the following types of crimes against cultural goods were selected: theft, dealing in stolen goods, robbery, budget fraud and criminal offences with protected cultural goods.FindingsAs a summary, it has to be stated that even though the number of the criminal procedure of these crimes in Hungary is low, it cannot be concluded that illicit trafficking of cultural goods in Hungary occurs only rarely. A specific characteristic of the phenomenon is high latency. To examine this phenomenon, the author has drawn up a list of indicators.Practical implicationsThe aim of this project is to provide background information and materials for training programs. It is necessary to develop a more comprehensive understanding of the problem. The role of the experts is outstanding in these cases; the clear definition of their tasks and competence is very important. Information to all “actors of this scene” (from the collector to the art dealers) can contribute to the prevention too.Originality/valueThis study presents the characteristics of the criminal procedures and the difficulties of both the detection and the evidentiary process to provide educational material for training. The author would like to raise awareness about the problem and draw attention to the need for unified legal practice.

The effect of legal retail price on legal cigarette demand and illicit trade in Southeast Asia

The effect of legal retail price on legal cigarette demand and illicit trade in Southeast Asia