This presentation by Arndt Sinn was made at the 2nd Task Force Meeting on Charting Illicit Trade held on 5-7 March 2014. www.oecd.org/gov/risk/charting-illicit-trade-second-task-force-meeting.htm

1. 2nd meeting
OECD Task Force on Charting
Illicit Trade (TF-CIT)
Session 7: Exploring Future sectors of Illicit Trade
TF-CIT: two years on - progress, prospects and trends
by
Prof. Alain Bauer, Dr. Xavier Raufer & Prof. Dr. Arndt Sinn
Presented by Prof. Dr. Arndt Sinn
7th March 2014

2. Overview
 Part one: Prof. Raufer explores the experience of the
past two years and suggests a number of additional
measures designed to build and expand on the progress
already made within this conceptual framework
 Part two: Prof. Sinn describe the impact of the law to
solve the illicit trade problems
 Part three: Prof. Bauer addresses the vital area of
determining a new direction for public policies that will
be more effective and proactive in detecting and
punishing illicit trade

3. Part 1- Past and Future
 What do we know?
 OECD provides a suitable medium
 scale of the damage resulting from illicit trade worldwide
gives TF-CIT members cause
 extensive agreement on who is responsible for illicit trade
and who benefits from such practices
 general agreement on the end goal of the TF-CIT
 broad agreement on the manner in which the TF-CIT should
achieve its end goal

4. Part 1- Past and Future
 What do we want?
 illicit trafficking of illicit goods is only part of the problem
 Pay more attention to: illicit trafficking of licit goods and
services
 expand on this point in terms of the definition of the
shadow/informal economy

5. Part 1- Past and Future
 What can we do?
 TF-CIT must draw up a simple, clear methodology designed
to measure illicit trade, sector by sector
 TF-CIT must providing new tools able to combat the
problem
 predict and prevent, anticipate and identify the
developments as early and as quickly as possible
 system of early detection of criminal threats

6. Part 2 - The impact of the law
 What is illicit trade?
 Illicit trade as a challenge for the law
 different manifestations of illicit trade
 Illicit trade as a danger for the civilian population
 Empirical studies and experiences

7. Part 2 - The impact of the law
 Challenges for the law
 Find the danger in the behavior of a person or company
 partial lack of harmonisation of legislation
 “dual-criminality” principle
 regulations in some countries are scattered/fragmentation
 “normative clarity”

8. Part 2 - The impact of the law
 Ways to solve legal problems
 comprehensive database including all types of illicit trade
 compiling information
 relevant standards governing crimes and criminal
procedure must be described
 alternative models for prevention
 holistic approach – cooperation with the private economy
 Illicit trading must be made unattractive

9. Part 3 - Illicit trade and public
policies
 Current situation
 official hypocrisy
 criminal activities have become increasingly profitable
 The criminal underworld has become a key player in
international finance
 But why?

10. Part 3 - Illicit trade and public
policies
 Steps....
 The eighties: Savings & Loans crises
 The eighties: the “Yakuza recession”
 The Russian crisis of the nineties
 The “Tequila crisis” of 1994
 The Thai crisis of 1997
 The subprime crisis of 2007

11. Part 3 - Illicit trade and public
policies
 New trends:
 hybrid nature of criminal organisations
 close ties between criminals and their banks

12. Part 3 - Illicit trade and public
policies
 Consequences:
 Drawing up effective public policies requires an initial
consensus on the underlying issues that always impact on
political decisions
 React to the three types of dangerous fakes:
 “real-fake”
 “fake-real”
 “fake-fake”
 new technologies have a crucial part to play

13. Part 3 - Illicit trade and public
policies
 consistent approach
 introduction of an international agreement between
major powers directly dealing with fraud.
 at the request of the OECD—create an interest group to
combat fraud and encourage international organisations
to introduce a binding system of international
negotiations, backed by a tool for early analysis and
monitoring of these issues,
 removing those systems that currently make it possible
to escape government control