Wednesday, October 26, 2016

SEA Illicit trade report

The Economist Intelligence Unit has released its report on illicit trade in Asia. It defines illicit trade to cover many illegal acts including counterfeiting.  Illicit trade is enabled by varying combinations of corruption, incompetence and indifference. The difficulty collecting hard data makes it hard to quantify. But overall they conclude that the counterfeit and mis-declared goods along with other illicit trade is rising. Along with the European Chamber of Commerce in Singapore, the Economist Intelligence Unit has created the Illicit Trade Environment Index, which measures 17 economies in the Asia Pacific region on the extent to which they enable illicit trade.

The factors that lead to this trade's growth are plain to see. Acceptance of low level economic crimes and weak enforcement of laws are clear reasons. China is a large part of the problem but it is improving. Developed markets often score well due to their stronger legal environments. But Singapore scores badly due to its laissez fair attitude to transhipment, worth billions - implying that Singapore earns a great deal of money transhipping illicit goods. Emerging markets with weak legal environments are havens for illicit trade naturally. This applies especially to Cambodia, Laos and Myanmar but Indonesia, Philippines and Vietnam are only slightly above the bottom 3. Only 9 of 17 countries studied have proper Customs recordal system in place for IP - 20 years after the WTO TRIPS agreement too effect for most countries!



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