TRACIT organization aims to tackle illicit trade

A non-profit organization that aims to bring together private and public partners in the fight against illicit trade has been launched in New York City today.

The Transnational Alliance to Combat Illicit Trade (TRACIT) has the ambitious aim of stopping "the significant and growing economic and social damages" caused by activities such as trademark counterfeiting and copyright piracy, and people trafficking.

"Illicit trade has grown well beyond the capabilities of individual governments and individual companies and now demands a sustained, coordinated response," said TRACIT director-general Jeffrey Hardy (pictured), a former director of the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (BASCAP) unit. "Business has an important role to help shape this response."

TRACIT will try to "intensify business collaboration with governments and inter-governmental organizations to mitigate the social and economic harms of illicit trade," he continued.

The organization launches with several industrial sectors in its sights – agri-foods, alcohol, fisheries, forestry, pesticides, petroleum, pharmaceuticals, precious metals and gemstones, tobacco, and wildlife – and its work plan aims to reduce vulnerabilities in supply chains, strengthen business responses through information sharing, improve awareness and contribute business best practice to the anti-illicit trade and enforcement activities of public bodies.

An early member company is consumer goods giant Procter & Gamble, and the firm's global brand protection leader - Shelley Duggan - said that TRACIT "can help us protect our global supply chain from exploitation by illicit traders, thereby lowering compliance costs, improving efficiencies and delivering quality to our consumers worldwide."

Global Financial Integrity in 2017 estimated that transnational crime is valued at $1.6-$2.2trn a year, and the World Economic Forum in 2014 estimated the value of illicit trade and transnational criminal activities at between 8 and 15 per cent of global GDP, according to TRACIT.

"The economic losses are staggering, in terms of lost market share, slower growth and rising supply chain compliance, security and insurance costs," says Hardy. "But these costs multiply when accounting for drains on tax revenue, the use of forced labour, obstruction of sustainable development, organized crime, terrorism and the plundering of natural resources."

Illicit trade threatens human health and the environment, fuels corruption and generates revenues that organized criminal groups re-invest in the legal economy or in the commission of further criminal acts. Moreover, it bankrolls extremists and terrorists around the globe – and the lost revenue undermines the tax base of many economies, according to the new group.

TRACIT's launch has been welcomed by the US Department of Homeland Security (DHS), the UN Office of Drugs and Crime (UNODC) and the Organisation for Economic Co-operation and Development (OECD).