Illicit trade has existed since the earliest establishment of global trade routes, but in the last few years, the sophisticated connections enabled by cyber technology have emboldened criminals from all corners of world and, in the process, are deeply threatening the stability of our planet.
That’s the central argument of a new book by transnational crime expert Louise Shelley, PhD. In her book, “Dark Commerce: How a New Illicit Economy is Threatening Our Future,” Shelley, director of the Terrorism, Transnational Crime and Corruption Center at George Mason University, connects the dots between the largely unmonitored cyber marketplaces for drugs, human and sex trafficking, and illicit trade in timber, wildlife and fish, and high-level political and financial corruption.
The underground cyber markets have had a destabilizing effect on global health and population, Shelly told TCR’s European contributing editor Cara Tabachnick, who caught up with her in The Hague at this year’s conference of Crime Stoppers International, an NGO dedicated to anonymous citizen crime reporting.
In a conversation with Tabachnick, Shelley discussed China’s role in dark commerce, how technology has ensnared rural communities in illicit trade, and why law enforcement needs to become more “computer savvy” if it ever hopes to contain the problem. The conversation has been slightly condensed and edited.
The Crime Report: How did illicit trade grow to the magnitude that we see today?
Louise Shelley: Illicit trade has been growing exponentially in the last 30 years in part because of the rise of new technology. The fact that most of the world’s population is now connected to cell phones, and to the internet, has fueled illicit trade in rural areas that used to be inaccessible. For example, a third of rural India is now using illegal pesticides, purchasing the goods through the Internet and cell phones, and directly affecting the health and food supply of the people. These counterfeit harmful products have shown up in the most remote areas of the world. If you look at the history of illicit trade, it was in ports and big cities; it was along rivers. Now, with transport links and communications, it’s everywhere.
But there are two very potent forces at work simultaneously: the rise of illicit trade through technology, and the rise of trade that undermines the sustainability of the planet. The misuse of regulation around air, land, trees, fish, and wildlife has also contributed to the rise of illicit trade. These regulations are [required] for the survival of human life on the planet.
TCR: In your book, you write illicit trade undermines stable governments and can create worldwide conflict. How is that possible?
SHELLEY: At the start of the conflict in Syria, in the period before the Arab Spring, an enormous drought in Syria was making it very, very difficult for farmers. There was no water for irrigation, so the government introduced regulations on digging wells. Because of corruption, people bribed officials for rights to drill wells, and they did that so much there was just no water left in the ground. And within a relatively short period of time before the Arab Spring, 3.5 million people moved to urban areas which had no possibility of maintaining them, no infrastructure, no support services. It’s in these communities where the Arab Spring started. And people who were displaced once became the illegal immigrants into Europe as they tried to escape the violence.
TCR: The Chinese government plays a large role in the global trafficking of these illicit goods. Why is that?
SHELLEY: One reason is that China is the factory for the world. There is a large, rising middle class who want standards of living they haven’t known before. It’s an enormous pressure on the resources of the planet, on the fish, on the timber, and it leads to a massive illicit trade in these natural resources. In the U.S., we have 50,000 people a year dying from opioid overdoses. Many of these drugs were purchased on Chinese web sites. The Chinese government doesn’t bother with the sites, because it’s meant for an external market. They are not being taken down by Chinese authorities, because they are not charging Chinese citizens.
In the middle 1800s, China was brought down by England in the first opium war, France and the U.S. joined England in the second opium war, in the mid-1850s. They defeated China and this has been an enormous embarrassment, and it’s something they haven’t forgotten, and they still teach their children about it in school. I wonder if in some ways, this trade in fentanyl is revenge for the opium wars. In so much of illicit trade, the past shapes the present.
TCR: What has been the Internet’s role in has sharpening opportunities for illegal trade?
SHELLEY: It’s not just the Internet; cellphones can send communications on Twitter and WhatsApp, and many other kinds of encrypted technology, that have allowed communications to be quick and anonymous and therefore very hard to trace.
In the book, I talk about the three stages of illicit trade, the first stage is where people know each other; they are trading in tangible goods, and they are using money, valuables and gold. Second, they are going into cyberspace, where they are trading tangible goods, using credit cards, and using other forms of electronic payment; In the third stage, they are working in the cyber world, trading virtual product, trading virtual currencies. All of these exist simultaneously, with variations amongst them.
TCR: Due to cyberspace and marketplaces on the Dark Web, like Silk Road, has there been a change in the type of goods that are traded?
SHELLEY: There are now Trojans, botnets allow you to steal people identities, their credit card information, break into their bank accounts, shut down their computer systems, and use ransomware, so it’s much more intrusive into everyday life than the type of illicit trade we saw before. The Silk Road site, which started out selling drugs, was the first large marketplace on the Dark Web. Within two years it had done $1.8 billion dollars’ worth of corrupt business in the cyberworld.
[Editor’s Note: the Silk Road site was shut down by the FBI in 2013, and its founder, Ross Ulbrecht, was arrested. A month later, it was back on line as Silk Road 2.0 under new management.]
TCR: How has this effected law enforcement strategies?
SHELLEY: When things go into the cyber-world, they don’t change fundamentally, but the scale and the speed becomes just enormous. Silk Road Two was over double the size of Silk Road One. Every new level of involvement in this gets larger, with more volume and greater profits. Part of what the cyberspace does is help us understand the magnitude of illicit trade, and law enforcement can get some awareness of its dimensions.
Law enforcement needs to be much more computer savvy. But the problem is that most of the tech world and the technology and information that goes alongside it is housed in the records of computers and software companies. So they have the data, they control access to data, and unless there is cooperation with the technology community, it is not really possible to combat illicit trade at any meaningful level.
TCR: What are the consequences of this dark commerce if we can’t get a handle on how to control this illegal trade?
SHELLEY: Illicit trade has many different consequences. It’s killing the resources we need to live on this planet. Secondly, the products being traded are produced illicitly are often harmful to individuals, whether they are pharmaceuticals, cosmetics, pills, or cigarettes. They don’t match health standards. When you deprive people of the resources they need to live on, whether its fish from illicit trade, or chemical dumping off the coast of Somalia by Italian mafia crime gangs, regions are destabilized. Funding from illicit trade helps perpetuate conflict and instability, and the profits from illicit trade are providing enormous revenues to bad actors and enhancing corruption which undermines the rule of law and government.
This is not some peripheral phenomenon. Many of the illicit goods go through the same supply chains, ports, legitimate routes; and the money often gets integrated into the global financial systems. One of the biggest problems is it’s so easy to launder money through real estate. Numerous prestigious banks have been fined for money-laundering in connection with drug trafficking, dual-use equipment, and nuclear proliferation. So this has implicated the main sectors of our financial system. There is not yet a clear understanding on the great cost illicit trade great poses to our future. As I say in the ending of my book, there are no jobs on a dead planet.
Cara Tabachnick, former Managing Editor of The Crime Report, is now a free-lance writer based in Spain, where she covers European crime issues for TCR and other publications. Readers’ comments are welcome.