Security experts spotlight the dangers illegal trade pose for America

Counterfeit goods fund traffickers and terrorists.
Jessica Levy | for United to Safeguard America from Illegal Trade (USA-IT)

To unsuspecting consumers, buying counterfeit or stolen goods may seem like an easy way to get a great deal, but often don’t realize they’re not buying a legitimate, legal product. This combination is at the heart of illegal, black market trade, which has far-reaching and dangerous consequences.

In communities across America, illegal trade is fueling human trafficking, narcotics smuggling and terrorism, according to security experts at the United Nations and the International Criminal Police Organization (INTERPOL).

From tobacco and pharmaceutical products to fashion items and tech products, billions of dollars worth of illicit goods are sold each year, and the profits line the pockets of criminals.

To combat the rising tide of illegal trade, United to Safeguard America from Illegal Trade (USA-IT) is bringing together a diverse group of stakeholders from various industries and the public sector. The goal is to empower local officials and law enforcement to better enforce illegal trade, and to expose the hidden costs and consequences of this crime. USA-IT is also advocating for policy change to prevent illegal trade and its negative outcomes.

Hidden costs and consequences of illegal trade
Illegal trade is not a “victimless crime.” In fact, there is a lengthy list of possible and probable victims. According to Barb Bergin, executive project director of Crime Stoppers USA and executive director of Central Florida Crimeline, victims may include children and others who are forced into labor by human traffickers.

“Things grown cheaply or made cheaply — they are made by people being exploited. No one is giving anything away for free. If descriptions are vague or not clear or thorough, you can tell you’re not dealing with a legitimate organization — and someone is hurt by that,” Bergin said.

Businesses suffer, too — especially small or medium-sized businesses that typically specialize in only a few products and operate on thin profit margins, noted Dr. Jeff Rojek, Director of the Center for Anti-Counterfeiting and Product Protection at Michigan State University.

“When you allow counterfeiting to occur, you’re undermining the existence of these businesses that employ millions of individuals in this country and are key to our economy,” Rojek said.

In addition to the individuals and businesses that are hurt throughout the production and sale of illicit goods, American cities and towns also miss out on the lost tax revenue that they would have received if the goods were purchased legitimately. That leaves less funding available for schools, transportation and other critical local services.

“Nearly a quarter of cigarettes consumed in the United States are purchased illegally —resulting in up to $7 billion in tax losses to individual states and municipalities. And that’s just cigarettes,” said Hernan Albamonte, head of U.S. Illicit Trade Prevention for Philip Morris International.

Instead, black market criminals use the funds from illegal sales to maintain and grow their criminal networks throughout the country and abroad.

“American businesses are losing so much money to these criminals, and they’re using that money to pump our streets full of drugs, which bring additional crime; guns, which bring more violence; and instability to our communities which increases the illegal activity these criminals are profiting from. It’s a vicious circle,” Albamonte said.

Counterfeit pharmaceuticals can put consumers in danger
In some cases, illegal trade in counterfeit pharmaceuticals — a highly profitable area for criminals — can have dangerous results. While a counterfeit bag or scarf may not cause direct harm to a consumer, counterfeit pharmaceuticals can be harmful or even deadly.

“Counterfeit drugs often don’t contain any medicine and so patients are not getting the medicine they need to treat their illnesses. The pills could be contaminated, could contain bacteria, it’s very serious,” said Tara Steketee, director of Global Product Integrity at Merck.

In this case, the old adage is true: If an advertisement seems too good to be true, it probably is. Stay away from links on Snapchat or Instagram, or from online pharmacies that don’t make it clear from where they’re operating.

“Really know who you’re buying from and take the time to choose a national chain or a licensed mom-and-pop — it might not be the cheapest and easiest thing to do, but it is the safest thing to do and the best way to ensure you get the medicine you need and are not poisoned,” Steketee said.

Advocating for a multi-faceted solution

A combination of factors has led to a recent proliferation in the sale of illicit goods, including e-commerce platforms that allow anonymous third-party sellers to peddle their wares without oversight. Additionally, as ongoing supply chain issues cause shortages throughout the country, some criminals are taking advantage of what they view as an opportunity to hawk counterfeit or illegal products to meet demand.

In order to prevent the situation from deteriorating even further, industry experts are advocating for a multi-faceted approach to tackling the problem.

“No one government or industry can address this complex problem on its own,” Albamonte said. “It requires cooperation and public-private partnerships — making full use of existing expertise, information sharing, innovative solutions and evolving technologies. Public actors, the private sector and civil society alike all have a role to play.”

Suggestions from USA-IT partners include:

• Increasing information-sharing between industry, law enforcement and government
• Funding people and agencies that try to stop illicit products from getting into the United States, including DHS, law enforcement, port authorities and people investigating containers
• Increasing transparency in online sales, providing American consumers with the necessary information about sellers offering products, making them aware of the risks of purchasing counterfeit products, notifying them if they potentially bought counterfeit products, and removing as soon as possible counterfeit products once they have been identified
• Increasing prosecution of illegal traders to remove the perception that illegal trade is a “low risk” activity
  USA-IT will present detailed policy recommendations to members of Congress at the USA-IT D.C. Summit on December 1-2, 2021.

Learn more about United to Safeguard America from Illegal Trade (USA-IT) and its efforts to combat illegal trade.

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