Study uncovers four global illicit trade hubs

A study has identified four geographic hubs of illicit trade for organized crime in South and Central America, the Middle East and Eastern Europe.

The Smugglers’ Paradises in the Global Economy: Growing Threats of Hubs of Illicit Trade to Security and Sustainable Development was unveiled at the IP Crime Conference organized by Interpol in Oslo today, and describes how the four hubs share “a permissive environment for criminals and enablers to thrive.”

The four hubs are Ukraine, the Argentina-Brazil-Paraguay tri-border area, Panama, Guatemala, and Belize in Central America, and Dubai in the Middle East, according to the Terrorism, Transnational Crime and Corruption Center (TraCCC) at George Mason University, which compiled the report.

The aim of the study was to inform policymakers and communities about the interconnected harms and multiple compounding threats associated with hubs of illicit trade and to provide recommendations for their disruption.

The definition of illicit trade as used in the report includes exploitation of natural resources, counterfeits, excise goods, drugs, arms, and human trafficking and smuggling. Free trade zones in particular are described as “hotbeds” of all types of smuggling and counterfeiting

Hubs for illicit trade are characterised by a high level of corruption and weak financial regulation, as well as poly-criminality and crime convergence, with the same actors often involved in different types of trafficking and smuggling. They tend to rely on a wide range of legally registered companies that enable their activities. They have spillover effects on neighbouring countries

The role of hubs in sanctions evasion is becoming more prominent given a recent increase in the number of international and national sanctions imposed on individual countries, and they have a high level of resilience to external shocks – as evidenced by “the COVID-19 pandemic and the Russia-Ukraine war.”

“This study underscores the critical need for governments and the private sector to prioritise the fight against illicit activities and to crackdown on organized crime within their Free Trade Zones and other hotspots,” said Louise Shelley, director of GMU’s Hubs of Illicit Trade project and TraCCC.