The Dark Side of Illicit Economies: Free Trade Zones, Trade-Based Money Laundering (TBML) and Port Security (The Americas In Focus), ICAIE

Corrupt ports and Free Trade Zones around the world enable cartels and other criminal organizations to transport illegal goods, expand their illicit international trade, export criminality and violence, and launder the revenues of their illegal activities. The strategic dialogue will bring together representatives from the private and public sectors to address the detrimental effects of illicit trade on ports, economic security, and global supply chains. The objective of this session is to address the issue and the vital importance of creating public-private partnerships in order to combat the problem and boost security and enforcement. While no single entity can solve the problem alone, building long-lasting partnerships based on shared goals, in-depth expertise of the situation, and resources may be the best approach to succeed.

On 13 July 2022, in Miami, Florida, the International Coalition Against Illicit Economies (ICAIE) hosted and chaired a "Strategic Dialogue on Free Trade Zones (FTZs), Trade Based Money Laundering and Port Security" at the 2022 Concordia Americas Summit.

The following were prepared opening points for David M. Luna, ICAIE:

As the ICAIE Executive Director, it is a pleasure to participate in, and an honor for ICAIE to co-host with Concordia our extended series to mobilize public-private partnerships to counter illicit economies and related crime convergence and corruption across borders, and in this Summit, in the Americas.

? Let me again thank?Concordia?for their continued partnership and support for NGOs like ICAIE to bring together leaders from governments and the private sector to discuss transnational security issues that profoundly impact our markets and communities alike.

? Leaders such as those represented in our dialogue this morning. It is a great honor to have with us this morning:

??Steve Francis?, Acting Director, Homeland Security Investigations (HSI),?U.S. Department of Homeland Security

? Dr. Janio Rosales, Minister of Economy, Republic of Guatemala

??Gaston Schulmeister, Director of the Department against Transnational Organized Crime (DTOC),?Organización de los Estados Americanos

??Gregoire Verdeaux?, Senior Vice President for External Affairs,?Philip Morris International?(PMI)

??Dr. Anthony Zook, Executive Director Product Integrity,?Merck?& Co., Inc. / Merck Sharp & Dohme (MSD)

??Chad Wolf?, President, Wolf Global Advisors, former Acting Secretary of U.S. Department of Homeland Security (DHS)

??Ana Linda Solano, Professor and Attorney, Criminal Law and Policy, and former Advisor to Attorney General of Colombia.

David M. Luna ?? ?? ?? Threat Convergence ? Kine-Dynamics

Let me now share some points on the current state of affairs concerning cross-border illicit threats in our hemisphere to help frame our discussion.

• While global communities continue to grapple with the pandemic, inflation, criminal violence, and authoritarian-inspired wars and insecurity, we continue to face complex and evolving threats from a wide range of illicit vectors and bad actors.
• Illicit supply chains and unregulated ports and Free Trade Zones around the world enable cartels and other criminal organizations to transport illegal goods, expand their illicit international trade, export criminality and violence, and launder the revenues of their illegal activities.
• No region is immune from these criminal threats.

The severity of today’s illicit threats include:

• Narcotics continue to remain the lifeblood of dangerous cartels, violent gangs, and other criminal organizations.
• The flooding of dangerous opioids such as fentanyl are killing too many of our young citizens, while helping to finance greater violence in our communities, be it in Chicago or Miami, Guatemala City, Sao Paolo, Lima, and other cities across the in the region.
• The homicide rates in Latin America and the Caribbean are among the highest in the world with firearms and semi-automatic guns especially from the United States contributing to the violence.
• Corruption, porous borders, and weak institutions create a climate of impunity for criminal activity.
• While Illicit trade was already booming prior to the pandemic, the proliferation of counterfeits has exploded especially personal protective equipment (PPE), fake medicines, and therapeutics during COVID as lockdowns and ecommerce marketplaces made it easier to buyboth licit and illicit goods online.
• Criminals continue to prey on the poor and desperate and similarly profit from human trafficking and smuggling.
• And so many other harms further complicate cross-border law enforcement efforts.

See Full Concordia-ICAIE Strategic Dialogue on You Tube video:

As we noted in our new ICAIE publication which is included in this Summit’s materials thanks to Concordia, the inter-connections, and the ripple effects that illicit economies have across other trade hubs, FTZs, marketplaces, and supply chains including the bad actors and threat networks – and their enablers -- behind the illicit trade also become important.

• To strengthen regional security in the region to counter illicit trade including at ports and FTZs will entail effective public-private partnerships.
• Critical will be ways to support inter-regional cooperation to improve maritime and port security to disrupt illicit trafficking and deny transnational criminal groups the ability to operate in the hemisphere and corrupt governmental institutions.

ICAIE's New Report, "The Dark Side of Illicit Economies and Trade-Based Money Laundering: Free Trade Zones, Ports, and Financial Safe Havens" (In Focus: The Americas and Global Threat Convergence) can be accessed here.

The ICAIE report and recommendations outline the importance of public-private partnerships to counter illicit trade and TBML. ICAIE highlights the importance of leveraging strategic intelligence, network analytics, and pattern-of-life forensics to disrupt the logistics, financial wherewithal, and corruptive influence of criminals and their complicit enablers across borders, trade hubs, illicit economies, free trade zones (FTZs), and vulnerable ports. While the report has a focus on the Americas, it also illuminates the convergence of transnational criminal activities and illicit financial threats across other regions and global supply chains.

In recent decades the confluence of transnational criminal structures and illicit economies has grown to create a clear and present danger to global security by siphoning trillions of dollars from legal economies. These funds fuel growing corruption, instability and violence while destabilizing markets in the Americas and around the world. Criminal actors and threat networks connected through global super fixers exploit advances in technology, transportation and other critical infrastructure for illicit enrichment. In these dangerous times, converging illicit vectors erode our collective governance, prosperity, and security.

"Illicit trade, the trafficking and smuggling of counterfeit goods, narcotics, humans, natural resources, WMD, illicit cigarettes, and other contraband impact the security of all societies. Kleptocrats, criminal organizations, terrorist groups, and their enablers exploit networked hubs of illicit trade centered on free trade zones, ports, and other logistical channels of transportation, communications, and trade," said David M. Luna, ICAIE Executive Director. "This allows illicit networks - such as the Chinese triads, Mexican cartels, Primeiro Comando da Capital (PCC), and Hezbollah - to profit from an array of criminal activities and corrupt institutions, drain resources for economic development, and compromise the integrity of supply chains. No country is immune from these pernicious security threats in the globalized world."

ICAIE brings together diverse champions across sectors and communities, including former members of the public sector, companies and prominent organizations from the private sector and civil society to mobilize energies to combat cross-border illicit threats that endanger U.S. national security. In the coming months, ICAIE is committed to raising awareness of the harms and impacts of illicit economies, TBML, and crime convergence in risky FTZs and criminalized ports. ICAIE's engagement will include briefings in the U.S. Congress, the White House and federal government, and across the international community including at the 2022 Concordia Americas Summit in Miami in July. ICAIE will also continue to support the United to Safeguard America from Illegal Trade (USA-IT) alliance to fight illegal trade across the country.

During Concordia, ICAIE also published an op-ed in Florida Politics, 14 July 2022:

David Luna: Smarter, faster, better — combating illicit economies across the Americas

Illegal trade is a clear and present danger to U.S national security.

Earlier this year, the U.S. Coast Guard?offloaded?a seizure of $1 billion worth of cocaine and marijuana at Port Everglades in Fort Lauderdale. The seizure represents law enforcement’s commitment to stopping drug trafficking and illegal trade, but it also reflects the growing volume of illegal trade and the boldness of the criminals behind it

Today, illegal trade is a clear and present danger to U.S. national security. Every year, roughly $2.2 trillion worth of illegal goods are moved across global borders. This not only costs taxpayers, but it also fuels corruption, instability, and violence that can threaten communities in Florida and around the world.

Dangerous criminal networks get rich from many forms of illegal trade, including trafficking illegal drugs, guns, fake medicines and tobacco; cybercrime and organized retail crime; and smuggling stolen, counterfeit, and pirated goods and even human beings.

To carry out these activities, criminal syndicates exploit disruptions in the legitimate marketplace. Since the beginning of the COVID-19 pandemic, there has been a?40%?increase in counterfeited goods online. Current supply chain issues and shortages in products like?baby formula?are also likely to fuel the illicit marketplace.

Similar to how criminals take advantage of stressed markets and susceptible consumers, they also take advantage of advancements in technology and gaps in law enforcement activity to gain access to the marketplace. Free Trade Zones (FTZs) are areas where goods and products can be moved, stored, and processed without the intervention of local customs authorities. FTZs are used around the world, including in the United States, to help move global commerce more efficiently and inexpensively, but they have also become vulnerable to exploitation by criminal and terrorist networks.

The Colón Free Trade Zone (CFTZ) in Panama — the largest FTZ in the Western Hemisphere — has been publicly?accused?by the U.S. government of being among “the world’s most significant drug money launderers and criminal facilitators.” At another FTZ along the border of Argentina, Paraguay and Brazil, it is estimated that roughly?six billion cigarettes are smuggled?annually. The profits from this illegal trade are thought to be financing international terrorist organizations such as Hezbollah, which has a strong presence in the region.

Regardless of the commodity or activity, the world’s most dangerous criminals are highly sophisticated and exploit every possible opportunity to fund and bolster their operations.

To better safeguard the open markets and security of our homeland and beyond, we must strengthen our own law enforcement capabilities, starting with a better, more cooperative approach. A unified strategy can be forged by public and private sector collaboration to share expertise, data and best practices. We must also strengthen our political will across every level of the government to create and enforce strong policies that will crack down on these global criminal networks here in the United States and abroad.

An important step is being taken in Miami this week, where the?International Coalition Against Illicit Economies (ICAIE)?is hosting a strategic regional dialogue on illicit trade and FTZs as part of the 2022?Concordia?Americas Summit. As a partner of?United to Safeguard America from Illegal Trade (USA-IT)?— a coalition of more than 75 national and state brand enforcement experts, law enforcement agencies, academics, and leading business organizations — ICAIE is working to create dynamic partnerships that will help counter illegal trade to protect and strengthen our collective security.

No singular government or industry can address this complex problem on its own. It requires cooperative discussions, approaches and solutions that make full use of existing expertise, information sharing and evolving technologies. Government, the private sector, and civil society all have a role to play, and these organizations are helping to provide the critical path forward.

As policymakers, law enforcement and private companies work to share resources and intelligence, there are ways the public can protect themselves as well. Through self-education on illegal trade, its severe impacts on Florida’s communities, and how to avoid and report counterfeit and stolen products, we can mobilize others to work together and fight back. A good place to start is visiting?www.icaie.com?and?www.USAIT.org.

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David M. Luna?is the founder and executive director of the International Coalition Against Illicit Economies (ICAIE), and president and CEO of Luna Global Networks & Convergence Strategies LLC. He is a former U.S. diplomat and national security official; current chair of the Business at OECD Anti-Illicit Trade Expert Group (AITEG); chair of AIT Committee of the U.S. Council for International Business (USCIB); member of The Business 20 (B20/G20) Integrity & Compliance Task Force; and a senior fellow for national security and co-director of the Anti-Illicit Trade Institute (AITI), at the Terrorism, Transnational Crime and Corruption Center (TraCCC), Schar School of Policy and Government, George Mason University.

https://floridapolitics.com/archives/539057-david-luna-smarter-faster-better-combating-illicit-economies-across-the-americas/