The shadow
economy: gaining public- and private-sector support is vital in the fight
against illicit trade
KUALA LUMPUR, MALAYSIA - Media OutReach - 22nd March 2018 -
The existence of illicit trade has been an enduring issue that has escalated in
scope and magnitude. Since the complexity of the shadow economy makes it hard
to combat this growing issue in isolation, public- and private-sector support
is vital.
Advancing this conversation, over 120
prominent experts from government, law enforcement, international
organisations, industry, and academia across the region gathered at Hilton
Kuala Lumpur for the second Global
Illicit Trade Summit hosted by The
Economist Events. The full-day summit themed 'Out of the Shadows' opened with a holistic view of illicit trade
in the global environment before outlining the need to make it a mainstream
conversation so that consumers are aware of its impact, and how progress can be
made in combatting it.
Speaking to conference attendees, Normah Osman, senior director,
Multilateral Trade Policy and Negotiations at The Ministry of Trade and
Industry Malaysia, described the allure of illicit goods: "Consumers are naturally attracted to them
due to the lower prices and the social status conferred by the access to
premium brands. Sometimes purchasers are not even aware they are participating
in illicit activity as they are duped into thinking they are purchasing genuine
items when in reality, they have bought knock-offs."
The murkiness in defining what illicit
trade is has a role in keeping the activity in the shadows, as observed by Ali Salman, director of research at The
Institute for Democracy and Economic Affairs: 'Having a common definition of just what constitutes illicit trade
will directly impact the ability of the authorities to better coordinate
enforcement.'
Throughout the dialogues, delegates
addressed the role of policymakers and governance within an economy shadowed by
black market and money laundering, crypto currencies and the opening of
free-trade zones, contraband and counterfeit luxury goods, including the
illegal trades in cigarettes, arms and narcotics. Connecting and mobilising
businesses across industries, sectors and national borders during the summit
made it possible to establish concrete action points.
Another key highlight of the event was
the panel discussion on globalisation and the role of governance to curb
illicit trade. The session titled "Regulations -- Less is more?" discussed the
importance of global regulatory frameworks that has allowed counterfeiters to
benefit across borders.
Guilherme
Silva, managing director at JTI Malaysia stressed the urgency of the situation: "Malaysia
has seen such rapid movement in its taxation and regulation, creating a market
where 55% of the cigarettes in the country are illegal. Balanced regulation
must cater to the needs of the country and the economics of the industry. There
is a huge opportunity for the authorities to truly listen and gain different
perspectives that will help stronger enforcement by using the industry as
consultants."
Outlining a potential model for
collaboration for Intellectual
Property Rights (IPR), Seth Hays, Asia-Pacific chief
representative at The International Trademark Association described some
best practices: "There are IPR
Enforcement Centres of Excellence where various enforcement agencies come
together in China and the United States. What these centres lack at present, is
industry representation. There is great opportunity for the ASEAN Economic
Community and participants in the One Belt One Road Initiative, to "bake" into
itself, IP respect and protection, giving brands and rights owners, a voice at
the table."
Featured speakers included:
- Normah Osman, senior director, multilateral trade policy and
negotiations division, Ministry of
International Trade and Industry, Malaysia
- Deborah Elms, executive director, Asian Trade Centre
- Ali Salman, director of
research, Institute for Democracy and
Economic Affairs
- Silvino Schlickmann
Junior, acting executive director, INTERPOL
- Guilherme Silva,
managing director, JTI Malaysia
- David Luna, president
and chief executive officer, Luna Global
Networks & Convergence Strategies
- Vispi
Patel, managing director, Asia, L
Catterton
- Jessica Pyman, partner,
Hong Kong, Mintz Group
- Jeremy Douglas, regional
representative, South-East Asia and the Pacific, United Nations Office o n Drugs and Crime
- Luc De Blieck, deputy director, compliance and facilitation
directorate, World Customs Organization
- Shishir Priyadarshi, director, development division, World Trade Organization
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