Schar School Study Shows 4 ‘Hubs’ of Illicit Trade—and the Reasons They Flourish

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Louise Shelley: ‘This study underscores the critical need for governments and the private sector to prioritize the fight against illicit activities…’

A major new academic study highlights four geographic hubs of illicit trade for organized crime and specifies how each of the hot spots shares an enabling environment for criminals. In identifying the locations and the lax regulation and governance gaps that create the illicit trade zones, researchers say law enforcement and policymakers can take action to curtail the massive human, economic, societal, and security harms across the world.

The study, Smugglers’ Paradises in the Global Economy: Growing Threats of Hubs of Illicit Trade to Security and Sustainable Development, and its alarming findings were announced at the 2023 International Law Enforcement Intellectual Property Crime Conference organized by Interpol in Oslo in late September. A copy of the report and the accompanying research can be found on the Hubs of Illicit Trade page.

“This study underscores the critical need for governments and the private sector to prioritize the fight against illicit activities and to crackdown on organized crime within their Free Trade Zones and other hot spots,” said Louise Shelley, Hubs of Illicit Trade project director and University Professor at George Mason University. Shelley is also director of the Terrorism, Transnational Crime and Corruption Center (TraCCC) at Mason’s Schar School of Policy and Government. TraCCC’s Anti-Illicit Trade Institute (AITI), codirected by former U.S. diplomat David M. Luna, also participated in the project.

The study reveals that four global hubs—South America (the Argentina-Brazil-Paraguay tri-border area), Central America (Panama, Guatemala, and Belize), the Middle East (Dubai), and Eastern Europe (Ukraine)—share an enabling environment that fuels illicit trade, facilitated by regulatory laxity, and are points of convergence for different types of criminality, such as corruption, money laundering, and other security threats that contribute to the movement of illicit goods and contraband in Europe and the United States, amongst others.

“Our mission is to advance robust international cooperation, not only with European institutions and inter-governmental organizations but also with national law enforcement authorities,” Luna said from Oslo. “An important step in this direction is to strengthen the policing of Free Trade Zones and foster effective cross-border law enforcement and judicial actions, including participation in diplomatic fora.” Those include the upcoming global tobacco control meetings (MOP3) in Panama, the April 2024 Organization for Economic Cooperation and Development Working Party on Countering Illicit Trade, and the Oslo conference.