There has been much hype, and for good reason, around the Big Data revolution. Dramatic advances in technology have made it possible to develop services with large volumes of data that could never have been done with smaller data sets – allowing authorities to spot new patterns, and identify threats in near real-time. The ability to process data at speed has allowed extraordinary advances such as those which enable planes to fly safely by autopilot, and cars to navigate their own path more efficiently and safer than when driven by human beings. Why then has this power not yet been harnessed to tackle more effectively the ever increasing incidence of illicit trade and the proliferation of counterfeit goods? Some food for thought.

Globalization has had many positive consequences and driven economic growth, but it has also complicated the task of enforcement agencies. Production locations and trading routes have changed as manufacturers outsource more and more to low labour cost countries. Supply chains have evolved to reflect this and become more convoluted. Advanced production technologies are increasingly available to criminal organizations, and their products may even rival the quality of genuine goods. Over recent years illicit trade and counterfeiting have evolved from ‘boot-legging’ into one of the most powerful activities on the planet, with the economic impact of counterfeit products alone growing from 178 billion US dollars in 2007 to an estimated 1.77 trillion in 2015 according to the International Chamber of Commerce (ICC).

Most governments and institutions have not evolved in line with the technological advances of the past decades, and many still operate with legacy systems and legislation that were put in place before the expansion of globalization. Big Data dividends are all too often not harvested because of the inadequacy of the data sets available, and the insufficiency of analytical tools and resources to exploit them. Budgets are tight but we need to do more and better with them. In the new virtual world, linear approaches do not suffice and traditional ways of collecting and exploiting data are not enough – it is often the unexpected patterns that our lateral thinkers and data science experts identify or predict that make the difference, not only the answers to the questions we formulate in the field, no matter how much this experience matters.

Data sets can come from multiple sources. The private sector can do a great deal and governments create their own: be it in the sphere of tax and duties, or for other controls on product origin, or the distribution chain. Collecting data is not enough – putting in place the framework to ensure high quality data is essential: a cliché but true – ‘rubbish-in, rubbish out.’ Assuring data quality requires real rigour and expertise, and the constant application of critical thinking. Oh too easy for those who do not want to be properly regulated to bamboozle hard-pressed officials by offering up data sets that will not do the job – that are incomplete, or will not fit in with an international framework so essential in a cross-border world.

This might seem surprising given the potential scope of traceability data and the fact that producing it has become economically viable over the past years, making it possible, for example, for fast moving consumer goods (FMCG) companies to offer secure traceability even on the cheapest of products. But not even 1% of products available on the market today are protected with any traceability, let alone a secure traceability solution. This makes it difficult for law enforcement officers to be able to differentiate legitimate from illegitimate products, and for consumers to protect themselves from consuming potentially fatal products. Indeed many brands still handle counterfeiting as an intellectual property (IP) problem, delegating the issue to their legal departments and taking, at best, sporadic action.

Worse even, the mentality remains within some brand owners that promoting security on their products could be perceived by the customer as an admission that their products are not safe, which could potentially negatively affect their market share and reputation. And consumers likewise often fail to understand or ignore the risks they are exposed to on a day-to-day basis, and do not exercise their purchasing power to put pressure on producers to put in place more adequate systems. It is worth recalling that over one million people are thought to die each year from the consumption of fake medicines, and many more from contaminated food. This lacuna continues to fuel criminal and terrorist organizations, providing them with immense financial resources.

We know what the answer is: it is the collective responsibility of producers, distributors, consumers and law enforcers to reinforce data integrity, data collection, and data verification and exploitation. Only a combined effort by all stakeholders – institutions, consumers, governments, and the private sector alike – has a chance to disrupt illicit networks and reverse the growing trend of the past decades. The work of the WCO is crucial, providing its Members, and through its partners, the advice, expertise, standards and programmes which make it possible to work together. Equally, an integral part of the solution resides in the WCO’s pro-active and practical collaboration with other international institutions who work against illicit trade – it deserves our wholehearted support. Criminal enterprises grow their business and make alliances in dynamic and flexible ways – why would we accept to be any less good?

More information
www.sicpa.com