• Therewill be at least five lasting effects from the pandemic, including risingdemand for certain categories of illicit goods and an exacerbation of thee-commerce problem.
• Thoseeffects can be addressed through various means, including improving consumereducation, stronger public-private partnerships and more global collaboration.

ZURICH, SWITZERLAND - Media OutReach - 20 October2020 - Amidst the chaos created by the covid-19 pandemic and thevarious policy responses designed to contain its spread, the usual loosegrouping of malicious opportunists is exploiting new vulnerabilities:individual criminals, organised crime networks and international terroristorganisations. Lastingeffects: How the covid-19 pandemic will change illicit trade, a report from The Economist IntelligenceUnit, supported by Philip Morris International, cover these and other relatedissues, concluding with a series of recommendations for both the public andprivate sector.  

Thefive lasting effects

The first lasting effect is that thepandemic is accelerating a long-term shift in demand for certain commodities.The economic impact on employment, earnings and disposable incomes around theworld will force consumers to look for cheaper alternatives, increasing demandfor counterfeits and other illicit products.

The second effect is that the new marketsfor illicit goods are here to stay. Even if export controls on personalprotective equipment (PPE) are eased, for example, the damage has been done--oncecriminals introduce new products into illicit markets, they find a way to stay.

The third effect is another acceleration ofan existing trend: the shift to e-commerce platforms. E-commerce was alreadyproviding a strong sales channel before the pandemic. Now, with the increasedvolumes of goods being ordered on-line for citizens around the world stuck athome due to lockdowns, criminals have even more cover to sell their goods.

The fourth lasting effect is on deliveryroutes and supply chains. Supply chain disruptions can affect illicit tradersjust as much as they do their counterparts in licit trade. It also created newopportunities, particularly as customs organisations have become overwhelmed byvolume of small parcels and as governments seek to fast-track shipments relatedto the fight against the pandemic.

The fifth and final effect concernswildlife trafficking. Whatever the means of transmission, the covid-19 iswidely-agreed to be zoonotic in origin. There is hope that this will finallycompel countries at the centre of the trade, whether on the supply or demandside, to take action.

Recommendations.Trends gathered fromstudies and expert interviews so far point to critical long-term impacts of thepandemic on illicit trade. The report concludes with three key recommendations.

• Improveconsumer education.Consumers need to be made aware of the impact of their choices. Educationcampaigns are one of the best hopes for changing behaviours before they becomeingrained.
• Establishstronger public-private partnerships. This includes areas such as intelligence gatheringand sharing and addressing new challenges such as cyber-crime. Bettercollaboration can help stretch limited resources when budgets tighten, as theyhave during the pandemic.
• Makeglobal calls to collaborate.Collaboration on tackling existing illicit trade as well as coordination toprevent the expansion of illicit trade markets created during the pandemic willbe key.

Chris Clague, the editor of the report,says: "The pandemic has provided new opportunities for organised crime networksand international terrorist networks on which they wasted no time capitalising.Law enforcement and the private sector will fall further behind if they don'tat the same improve their efforts to collaborate and develop closerpartnerships to combat the trade."

About The Economist Intelligence Unit

The EIU is the thought leadership,research and analysis division of The Economist Group and the world leader inglobal business intelligence for executives. We uncover novel andforward-looking perspectives with access to over 650 expert analysts andeditors across 200 countries worldwide. More information can be found on www.eiuperspectives.economist.com.Follow us on

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About Philip Morris International

Philip Morris International (PMI) is leading atransformation in the tobacco industry to create a smoke-free future andultimately replace cigarettes with smoke-free products to the benefit of adultswho would otherwise continue to smoke, society, the company, and itsshareholders. PMI is a leading international tobacco company engaged in themanufacture and sale of cigarettes, as well as smoke-free products andassociated electronic devices and accessories, and other nicotine-containingproducts in markets outside the United States. PMI ships a version of itssmoke-free devices and consumables authorized by the U.S. Food and DrugAdministration to Altria Group, Inc. for sale in the United States underlicense. PMI is building a future on a new category of smoke-free productsthat, while not risk-free, are a much better choice than continuing to smoke.Through multidisciplinary capabilities in product development, state-of-the-artfacilities, and scientific substantiation, PMI aims to ensure that its smoke-freeproducts meet adult consumer preferences and rigorous regulatory requirements.For more information, please visit www.pmi.com.