Illegal trade worries the World Trade Organization

Brazil will present the impacts of smuggling and measures to contain the advance of the illegal market

To mark the ministerial conference of the World Trade Organization (WTO), the Crime Stoppers International Foundation (CSI), invites governments, businessmen and civil society to the panel "Threats of illegal trade". The purpose of the event is to draw up a series of recommendations that will be officially presented to the WTO.

The event will be open to all companies, entities and government representatives who will meet at the 11th WTO Ministerial Conference and are interested in protecting their industries, economies and countries from the threat of illegal trade.

Scheduled on December 12 (Wednesday), in Buenos Aires, Argentina, the panel will be attended by Ruud Smulders, CSI's executive director; Devrol Dupigny, director of global operations; and Edson Vismona, president of the Brazilian Institute of Competitive Ethics  and the National Forum Against Piracy and Illegality (FNCP).

Panelists will present the problem of illegal trade from different perspectives, highlighting the impact on international trade, health and the economies of the affected countries. They will also expose the relationship between illegal trade and corruption, money laundering and financing of terrorist groups, and how free trade zones are exploited by criminal organizations.

The scale and impact of illicit trade globally

Since the creation of the WTO in 1995, international trade has grown substantially, improving the living conditions of thousands of people around the world. However, this same growth has led to an exponential increase in illegal trade, which amounts to a value close to US $ 650 billion. It is estimated that the illegal financial flows related to this activity total US $ 1,3 trillion and that the illegal economy represents about 15% of the world GDP.

These overwhelming levels of illegal trade present a series of challenges that have not yet been resolved by the international community. It is necessary to implement greater and better controls to combat these illegal activities, promoting formal trade and positively impacting the governance and effectiveness of global sustainable development.

Brazil: case at the Ministerial Conference

Within the cases that will be presented during the event, Brazil stands out. In 2016, smuggling, counterfeiting and piracy generated losses for the country in the order of R $ 130 billion, added to the losses of productive sectors - tobacco, clothing, fuels, cosmetics, medicines, among others - and tax evasion, according to survey of the National Forum Against Piracy and Illegality (FNCP).

According to data from the Federal Revenue, more than 65% of the smuggled goods entering Brazil are cigarettes and, in the last year, the volume of illegal cigarettes reached 45,2 billion units.

The increase in smuggling has occurred due to a combination of factors, including the tax imbalance between Brazil and Paraguay, the economic crisis and the fragility of borders. While in Brazil, taxes represent 80% of the value of a pack of cigarettes, in Paraguay, taxes paid by cigarette manufacturers are only 16%, which favors the entry of the product across borders, which have a very control structure it's precarious.

The effects of the illegal market fall on society with the increase in Brazilian violence, since criminal organizations are financed by smuggling. In addition to crime, smuggling also generates losses in tax collection, fosters unemployment, impacts the competitiveness of companies in Brazil and harms consumers' health.

For Edson Vismona, the panel will be an opportunity to discuss effective measures to combat smuggling definitively. "It is necessary for the Government to establish a tax reform based on the reality of the Brazilian market, added to the increase in taxes in Paraguay to reduce the attractiveness of smuggled goods, in addition to intensifying border control", explains Vismona.

About Crime Stoppers International (CSI)

Crime Stoppers International (CSI) is an international NGO based in the Netherlands, whose mission is to mobilize international society to report, anonymously, information related to criminal activities. CSI maintains cooperation agreements with INTERPOL and maintains collaborative memos with the United Nations Office on Drugs and Crime (UNODC), the CNN Freedom project, Airline Ambassadors International (AAI) and the International Police Training Institute (IPTI).