Interpol investigation: Enhance legislation to deter illegal trade, says report

Trafficking casebook garners attention of Pakistan’s tobacco industry and tax watchdog.

KARACHI:

In its recent report, Interpol – the world’s largest police organisation, which Pakistan is a member of – has recommended local lawmakers of the member countries to enhance national legislation to shut down loopholes and increase the deterrent against smuggling and illegal trade.

The Interpol’s report, which is the first ever trafficking and counterfeiting casebook, has garnered some attention from Pakistan’s tobacco industry and the tax watchdog because it provides evidence of the connection between illicit trade and other types of organised crime.

The casebook details organised crime networks and how funds generated from illicit trade are used for other nefarious activities, according to Interpol’s website.

Be it tobacco or tea or other commodities, illicit trade is also a big challenge in Pakistan as both the relevant industries and the Federal Board of Revenue are engaged in fighting the menace of illicit trade – whose footprint can be traced back to the porous Pakistan-Afghanistan border.

When it comes to trafficking in Pakistan, cigarettes are one of the most trafficked commodities, said an official from the tobacco sector on the condition of anonymity. Nearly 25.4% of all cigarettes sold are counterfeit, denying the exchequer Rs.26.9 billion in tax revenues annually, according to the official.

The report argues for more stringent controls on transshipments and goods in free trade zones. “There is also a need for supply chain controls for key inputs, which in the world of cigarette manufacturing, translates to acetate low, green tobacco and low density polyethylene,” according to the official.

This casebook is a compilation of past and present criminal cases, which demonstrate the links between illicit trade and counterfeiting crimes and many other serious crimes, the Interpol website says. It is a free reference document for police and the public, to help them understand the involvement of organised criminal groups in counterfeiting and illicit trade, it says.

“It is interesting to note that the areas in Pakistan that are known for smuggling of tobacco products and other items are also infested with militancy,” a source in the FBR said on the condition of anonymity. “Financing of militancy is a topic, which has not been fully discussed in Pakistan,” he added.

Though the industry has been seeking for strong legislation and stringent enforcement for coping up with this menace, some sources say the local agencies have yet to come up with sufficient evidence to prove a direct link with illicit trade and organised crimes.

“There are examples of money-laundering whereby proceeds of illicit tobacco trade were used to fund tobacco factories in the UAE but there is not enough evidence to prove that illicit trade in the country was directly linked to terrorism,” said an official who requested not to be named.

However, the tax watchdog certainly faces strong resistance from the rackets involved in illicit tobacco trade – this includes threats to personal security. The officials also complain that borders, where most of illicit trade originates from, are beyond their jurisdiction.

The Interpol’s report also says that the criminal networks behind trafficking in illicit goods and counterfeiting are complex and pervasive. It, therefore, recommends the implementation of reliable, technologically advanced, and transparent tracking systems, such as the internationally renowned Codentify, to help protect government tax revenues and curb trafficking.

“We hope this book will raise awareness of the impact this crime has on all levels of society,” the report says.

Published in The Express Tribune, June 20^th, 2014.

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