Financial Transparency Coalition

Drug trade single largest component, followed by counterfeiting, finds new report from Global Financial Integrity

Global Financial Integrity

WASHINGTON, DC – Illicit trade in “goods, guns, people, and natural resources” is a $650 billion enterprise, which most negatively impacts the developing world, finds a new report published today by Global Financial Integrity. “Transnational Crime in the Developing World,” evaluates the overall size of criminal markets in 12 categories: drugs, humans, wildlife, counterfeit goods and currencies, human organs, small arms, diamonds and other gems, oil, timber, fish, art and cultural property, and gold.

“While this report includes a monetary measure of the cost of these illicit activities, it also stresses that the activities associated with these illicit markets—human rights abuses, corruption, murder— extract a significant toll on the lives of people in these developing countries and undermines economic growth and good governance efforts,” said report author Jeremy Haken.

Of the 12 illicit activities studied, trade in drugs ($320 billion per year) and counterfeiting ($250 billion per year) were ranked first and second in terms of illicit funds generated. Another key finding of the report was that profits from illicit markets are making their way to transnational crime syndicates through vast international trade networks. The report also emphasizes a link between transnational crime and economic “underdevelopment.”

Writes GFI director, Raymond Baker, in the report’s introduction:

The cross-border passage of criminal money is facilitated by the global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mispricing, and money laundering techniques. This is precisely the same structure that enables the movement of the other two components of illicit proceeds—the corrupt and commercially tax evading money. We cannot succeed in curtailing part of these flows while at the same time facilitating other parts of these flows. The developing countries bear most of the burden of this facilitating global structure, producing impoverishment, violence, and shortened lives for millions of people across the world.

The report rankings for the illicit markets examined are:

1. Drugs $320 billion
2. Counterfeiting Total $250 billion
3. Humans $31.6 billion
4. Oil $10.8 billion
5. Wildlife $7.8 to $10 billion
6. Timber $7 billion
7. Fish $4.2 to $9.5 billion
8. Art and Cultural Property $3.4 to $6.3 billion
9. Gold $2.3 billion
10. Human Organs $614 million to $1.2 billion
11. Small Arms & Light Weapons $300 million to $1 billion
12. Diamonds & Colored Gemstones $860 million

The report is available for download at http://transcrime.gfip.org. Questions may be directed to Monique Perry Danziger at mdanziger@gfip.org or 202-293-0740.

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Note to Editors:

All prices are in U.S. dollars.

Contact:

Monique Perry Danziger
mdanziger@gfip.org
+1 202 293 0740 ext. 222 (office)
+1 202 904 3113 (mobile)

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The Task Force on Financial Integrity and Economic Development addresses inequalities in the global financial system that penalize billions of people, and advocates for improved transparency and accountability.

Global Financial Integrity is a coordinating committee and founding member of the Task Force on Financial Integrity & Economic Development.

For additional information please visit http://www.financialtransparency.org