Counterfeiting core of USD 2 trillion transnational crime: GFI
By TIOL News Service
WASHINGTON, MAR 28, 2017: AS per the latest GFI Report, the business of transnational crime globally accounts for USD 1.6 trillion to USD 2.2 trillion annually. Titled Transnational Crime and the Developing World, the study highlights that the combination of high profits and low risks for perpetrators of transnational crime and the support of a global shadow financial system perpetuate and drive these abuses.
"The international community has paid too little attention to combatting the money in transnational crime, instead preferring to focus on the materials or the manifestations of the crimes,” noted GFI President Raymond Baker, a longtime authority on financial crime. "The fight against transnational crime needs to be redirected to combatting the money the crimes generate. This means shutting down the global shadow financial system that facilitates the moving and secreting of illicitly generated funds. None of this is technically difficult. It is a matter of political will.”
Authored by GFI Policy Analyst Channing May, the study estimates that counterfeiting is the most valuable transnational crime at USD 923 billion to USD 1.13 trillion on average per year, followed by drug trafficking at USD 426 billion to USD 652 billion. The ranges demonstrate the serious magnitude of and threat posed by global transnational crime.
"Transnational crime is a business, and business is very good,” said Ms. May. "Money is the primary motivation for these illegal activities. Linking this array of illegal goods are consistent trends in the organized networks involved in the crimes, the role of the global shadow financial system, and the negative consequences for governments, economies, and societies in developing countries. Very rarely do the revenues from transnational crime have any long-term benefit to citizens, communities, or economies of developing countries. Instead, the crimes undermine local and national economies, destroy the environment, and jeopardize the health and wellbeing of the public.”
GFI recommends several steps governments and other regulatory bodies can take to increase the levels of detection and interdiction of the proceeds of transnational crime:
- Require that corporations registering and doing business within a country declare the name(s) of the entity’s true, ultimate beneficial owner(s)
- Flag financial and trade transactions involving individuals and corporations in "secrecy jurisdictions” as high-risk and require extra documentation
- Scrutinize import and export invoices for signs of misinvoicing, which may indicate technical and/or physical smuggling
- Use world market price databases such as GFTradeTM to estimate the risk of misinvoicing for the declared values and investigate suspicious transactions
- Share more information between agencies and departments on the illicit markets and actors that exist within a country’s borders.