The Foreign Service Journal, October 2018

THE FOREIGN SERVICE JOURNAL | OCTOBER 2018 23 Victimization, moreover, is not just “virtual”; it can also be physical, as in the case of counterfeit drugs (often ordered online), which pose a growing public health hazard in the United States and are pervasive in Africa and Asia. In “The Health and Eco- nomic Effects of Counterfeit Drugs,” Erwin A. Blackstone et al . estimated that 9 percent of drugs consumed in Europe as of 2014 were counterfeit; the World Health Organization estimates that in parts of Asia, Africa and Latin America, 30 percent of the drugs sold are counterfeit. Corruption and illicit financial flows are key to the growth of illicit trade. Officials at every level are in a position to facilitate production, dissemination and transport of illegal goods. This is a particular problem in the developing world, but officials in the developed world also participate. It extends into the cyberworld, as well. For instance, two American law enforcement officials are presently serving sentences for criminal engagement with the drug kingpin who ran Silk Road, the first massive online market- place for illicit trade. As Mark Bilton, special correspondent for Vanity Fair , reported in his American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road (Portfolio, 2017), the operator of this darknet site processed $1.2 billion in transac- tions in cryptocurrency in its two years of operation before being closed down through concerted law enforcement efforts. Subse- quent takedowns of marketplaces for illegal goods on the dark web have combined the efforts of law enforcement in 40 countries. Without adequate safeguards in the global financial system, unfortunately, crime too often pays. And the leaked “Panama Papers” reveal how a single financial hub can receive ill-gotten gains frommany countries, including the proceeds of crime, ter- rorist groups and corrupt officials. While the dangers posed by illicit trade are easy to see, its scope and the complexity of its operations—including inter- faces with legal economic activity—make for a serious challenge in terms of developing and implementing an effective policy response. A Taxonomy of Transnational Crime Though transnational crimes such as the drug and arms trade, human smuggling and trafficking merit the most attention from law enforcement, international illicit trade also includes a vast range of counterfeit and pirated products sold online and through markets around the world. Counterfeit products range from sneakers and electronics to pharmaceuticals and pesticides that undermine the sustainability of life. Illegally harvested timber and fish that should not be caught and traded represent multibillion- dollar businesses. Besides being one of the fastest-growing segments among some dozen types of transnational crime, counterfeiting and piracy is also the most valuable. According to a 2017 study com- missioned by the International Chamber of Commerce, the global trade in counterfeit and pirated goods is estimated to generate between $923 billion to $1.13 trillion annually (this includes cross- border trade, domestic trade and digital piracy). The drug trade and human trafficking rank below counterfeiting and piracy in profitability. Human trafficking revenues are estimated at $150 billion annually. The rise of the internet, the dark web and social media has fundamentally transformed human trafficking around the world. Although many assume that this offense is only associated with hard-core criminals, it is a fact that, as in the past, govern- ment officials and business people are deeply involved in this inhuman business. Its growth and increasing profitability have ISTOCKPHOTO.COM/GANGIS_KHAN