The Fundamental Transformation of Illicit Trade Necessitates Net-Centric Partnerships and Strategic Alliances

David M. Luna, President & CEO, Luna Global Networks

Chair, GTDW Anti-Illicit Trade and Brand Protection Summit

Abu Dhabi, UAE

20 November 2018

Good morning.

Your Excellencies, H.E. Sultan Bin Saeed Al Mansoori (Minister of Economy, UAE), H.E. Secretary-General Dr. Mukhisa Kituyi (United Nations Conference on Trade and Development, UNCTAD), Distinguished Delegates, Ladies and Gentlemen:

It is an honor to be chairing today’s GTDW Anti-Illicit Trade & Brand Protection Summit.

Let me thank Andrew Keable and Michelle Wong, KW Group, and the Global Trade Development Week (GTDW) Advisory Council for organizing this week’s event in Abu Dhabi, as well as the Ministry of Economy and our committed sponsors for their leadership and support.

At our last GTDW Anti-Illicit Trade workshop in Shanghai, Luna Global Networks was proud to work with some of the partners that are here today to launch an anti-illicit trade alliance, to strengthen networks and find innovative ways to help protect our economies, markets, and communities against the harms and impacts posed by the global illegal economy.

We recognized that illicit trade is a threat multiplier that can impede broader economic and national security objectives including our collective efforts to fight corruption, organized crime, and terrorism.

Since that time, Luna Global Networks has continued to work with many champions across regions, sectors, and industries to harness the requisite energies to strengthen cross-border cooperation to address today’s fundamental transformation of illicit trade, through a network of networks where dynamic collaborations, strategic alliances, and collective action are helping to elevate our shared resolve to more effectively combat illicit markets.

For the reality is that no one economy or industry is immune from illicit trade and convergence crime.

And as some of our speakers will highlight at our conference this week, the global illegal economy is indeed booming and growing significantly every year.

Numerous international organizations have estimated that today’s global illicit markets, and various forms of “convergence crime”, account for several trillions of US dollars every year, to include the trafficking of drugs, humans, arms, counterfeit and pirated goods, illegal cigarettes and alcohol products, endangered wildlife, pillaged natural resources, and many other illicit commodities, corrupt proceeds and illicit financial flows.

This is simply a staggering amount and a menacing threat to our public health and safety.

Fake water (bottles) and foodstuff add a heightened public human security dimension, as do counterfeit medicines, auto parts, and other illegal fast-moving consumer goods (FMCG) that are toxic and deadly.

Of equal concern is not only the current breadth and scale of today’s illicit markets, but that many of them will double within five years’ time alone, and the fact that criminals are diversifying their illicit portfolio to finance other threats.

Building on the work of the OECD and its Task Force on Countering Illicit Trade, in a 2017 report by the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (BASCAP) and the International Trademark Association (INTA), it is projected that the global economic value of counterfeit and pirated goods alone will reach close to $3 trillion by 2022.

Internet on-line shopping and cybercrime also present a threat to companies and consumers alike. As U.S. Deputy Attorney General Rod Rosenstein has underscored, the financial costs from cybercrime will double from $US 3 trillion in 2015 to $US 6 trillion by 2021. (Source: Cybersecurity Ventures)

In addition to dis-incentivizing innovation and causing economic damages, other impacts include reputational harm, stolen data, lost productivity, theft of intellectual property, and other costs.

Illicit trade not only results in lost profits for companies, job displacements for workers, business closures, economic hardships for governments when less revenue is brought into the treasuries to fund public services, but that it also poses grave dangers to public health and safety as I just underscored.

Finally, as was discussed at our China GTDW Summit in Shanghai earlier this year, Free Trade Zones can have a “catalytic effect” on economies, including attracting Foreign Direct Investment and helping to expand economic growth.

But in too many parts of the world, FTZs are also exploited on a daily basis by some to facilitate illicit activities that produce broader market reputational harm and put the physical security of many communities in danger.

As we will hear shortly from The Economist Intelligence Unit (EIU) and TRACIT, the misuse of illicit trade and associated criminality in one FTZ can have serious security ripple effects in other FTZs all around the world.

Such connectivity and convergence between the world’s various free trade zones help to create a bigger cross-border threat altogether as some reports have underscored.

For example, when payments for counterfeits being trafficked through FTZs in the Gulf region from China and on to Africa may eventually wind up in another FTZ in Panama or Europe, where they then help to fund other types of illegal activity, be it more illicit trade or other forms of criminality and terrorism.

Illicit cigarettes are another illicit trade that helps to fuel corruption, expand organized crime, and finance terrorism and greater insecurity and instability.

With the Protocol to Eliminate Illicit Trade in Tobacco Products (the “Protocol”) taking effect earlier this year, it can be an important tool to disrupt and dismantle all forms of illicit trade across source, transit, and demand markets.

Towards this end, countries must sign and ratify the Protocol to address the cross-border challenges posed today by illicit networks and commit to be part of a global enforcement regime to tackle the illegal tobacco trade globally.

So what more can we do about these harms and threats?

As the new Chair of the Anti-Illicit Trade (AIT) Committee of the United States Council for International Business (USCIB), our members are committed to fight these wicked threats in all parts of the world.

Today, the USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility.

Our members include some of the biggest and most iconic American brands, global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide.

As the American affiliate in the Business and Industry Advisory Committee to the OECD and the International Chamber of Commerce, for example, our USCIB AIT Committee looks forward to working with other strategic alliances to harness and support public-private partnerships and a global coalition to fight illicit trade, and for more secure, sustainable trade and integrity in markets, supply chains, and institutions across the international community.

Through such collaborative efforts including here this week in the Abu Dhabi, we can do more together to combat illicit trade at all levels across global security landscapes.

We too can learn immensely from our UAE partners from their economic policies that promote innovation to modern and smart policing and enforcement that are innovative such as the UAE approach to cybercrime as Interpol Secretary-General Jürgen Stock underscored a few days ago in Dubai.

I am confident that our keynote speakers will inspire us and outline further ways and ideas to strengthen our joint resolve and through responsibility-focused partnerships, enhanced coordinated courses of action, and the leveraging of strategic alliances across borders, markets, and communities.

I will share some final thoughts at the end of our Day 1 conference this afternoon based on the outstanding roster of speaker’s that will help inform our discussion.

Without further ado, it is an honor to invite our first keynote speaker, His Excellency, Sultan bin Saeed Al Mansoori, Minister of the Economy.

In addition to his position as Minister of Economy, His Excellency Sultan holds numerous prominent and distinguished leadership positions in various high-level Committees and Boards with the UAE Government concerning matters related to Economic Cooperation, Investment, Securities, and Finance.

May I now invite H.E. Dr.Mukhisa Kituyi, Secretary-General, United Nations Conference on Trade and Development (UNTAD) to take the floor for his address.

Dr. Kituyi is a former Member of Parliament in Kenya, and Minister of Trade and Industry, and prior to becoming the 7th Secretary-General of UNCTAD, he was the Chief Executive of the Kenya Institute of Governance.

Our next keynote speakers will add valued insights and perspectives on the importance of public-private partnerships and need for collective action across markets:

Tarkan Demirbas, Vice President for Middle East, Philip Morris International (PMI).

Malek Hannouf, Chairman, Gulf Brand Owners Protection Group, (BPG), and Head of Intellectual Property Department, Middle East & Africa, Louis Vuitton (LV).

Earlier this year, The 2018 Global Illicit Trade Environment Index was released. The Index was commissioned by the Transnational Alliance to Combat Illicit Trade (TRACIT), and produced by the Economist Intelligence Unit (EIU) as means for the international community to address illicit trade by evaluating 84 countries on their structural capability to guard against illicit trade, highlighting specific strengths and weaknesses.

This morning the EIU and TRACIT will walk us through this very important Index and tool, and share some additional perspectives and policy recommendations on fighting illicit trade based on these surveys. As well as a specific report related to the Index for the Middle East.

We are honored to have with us this morning:

Chris Clague is the Managing Editor, and Global Editorial Leader, Trade and Globalization: THE ECONOMIST INTELLIGENCE UNIT (EIU):

Jeff Hardy is the Director General, TRACIT: Before joining TRACIT, he served as the Director of the ICC BASCAP initiative, where he united the global business community to fight illicit trade in the forms of trademark counterfeiting and copyright piracy. During 18 years with ICC, Jeff also led ICC’s work on G20, climate change, SME and sustainable development portfolios.

Learn more about the 2018 Global Illicit Trade Environment Index and Policy Recommendations at:

David M.Luna is a former US diplomat and national security official. Mr. Luna is the chief executive officer and president of Luna Global Networks, helping to mobilize greater collective action to counter illicit trade, illicit markets and related converging security threats. With more than 21 years in the US government, Mr. Luna has held numerous senior positions with the U.S .Department of State; Office of the Counsel to the President, the White House; U.S. Department of Labor; and U.S. Senate Committee on Banking, Special Investigations. Mr. Luna is the new chair of the Anti-Illicit Trade (AIT) Committee of the United States Council for International Business (USCIB) and is currently a Senior Fellow for National Security at the Terrorism, Transnational Crime and Corruption Center, Schar School of Policy and Government, George Mason University. He was previously also the President (Chair) of the OECD TFCIT; Chair of the APEC Anti-Corruption and Transparency (ACT) Working Group and APEC U.S. Coordinator for the ACT Pathfinder Initiative on Fighting Corruption and Illicit Trade; and Vice-Chair of the World Economic Forum Global Agenda Council’s Illicit Trade and Organized Crime group.

A Strategic Advantage: Luna Global Networks is an international security consultancy, well-positioned to help businesses and NGOs tackle the most pressing illicit trade and governance challenges and related security threats across borders, markets and industries through convergence strategies and tactical plans that target an illicit threat environment more holistically. LGN works on developing net-centric partnerships (a network of networks) that harness collective action through strategic alliances, the designing of pragmatic training to counter illicit trade, leveraging of innovative net-centric capabilities and the harnessing of transformative technologies that help produce greater results and more enduring solutions.

(Photos: Open Internet)

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