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Diplomacy in Action

Combating Illicit Trade and Converging Threats: Reducing the Harm to Economic Growth, Sustainable Development and Global Security

David M. Luna
Director for Anticrime Programs, Bureau of International Narcotics and Law Enforcement Affairs
Phuket, Thailand
October 27, 2011



Opening Plenary

Good morning and welcome to the third workshop of the Trans-Pacific Network on Dismantling Transnational Illicit Networks.

Before we begin, the U.S. Department of State joins our partners to offer our condolences and deepest sympathy to all those affected by the recent flooding that has devastated this beautiful country. To express our regret for the destruction of many Thai communities and ecosystems, and to recognize the continuing courage and determination of the Royal Thai Government, emergency workers, and volunteers in rebuilding, let us please observe a moment of silence. [Moment of silence.] Thank you.

It is a great pleasure to have Homeland Security Investigations Executive Associate Director James Dinkins, U.S. Department of Homeland Security; Colombo Plan Secretary General Adam Maniku, Thailand’s Office of the Narcotics Control Board (ONCB) Deputy Secretary General Sukhum Opasniputh; and Royal Thai Police Deputy Commissioner General Tesa Siriwato with us this morning.

I would also like to thank the Colombo Plan for its leadership in organizing and Thailand’s Office of the Narcotics Control Board (ONCB) and DHS’s Homeland Security Investigations in co-hosting, as well as the many others here who have worked with us to ensure the successful launch of this workshop: the National Anti-Corruption Commission (NACC), the Royal Thai Police, and the Australian Federal Police.

On behalf of The Royal Thai Government and the United States, we welcome all of our partners and applaud your leadership and active participation at this important gathering in Phuket.

In recent years, the United States and other partners have launched several innovative inter-regional platforms to combat transnational crime and dismantle illicit networks that threaten the security and stability of communities around the world.

For example, in May 2011, in Lisbon, Portugal, the United States and the European Union co-hosted the Trans-Atlantic Symposium on Dismantling Transnational Illicit Networks, a practical dialogue among senior European, U.S., West African and Western Hemisphere law enforcement and judicial officials to strengthen international cooperation to combat transnational criminal threats and illicit networks that span the Atlantic including drugs, arms, human smuggling/trafficking, money laundering and illicit finance, corruption, and maritime crimes.

Similarly, since 2009, the U.S. has partnered with Australia, New Zealand, Thailand, and other partners in Asia and the Pacific, to establish the Trans-Pacific platform: a network among senior law enforcement, security, and justice sector officials to strengthen cooperation to fight cross-border criminal organizations and other transnational threat networks with our own networks across the Asia Pacific region. The United States hosted the first Trans-Pacific Symposium in November 2009, in Honolulu, Hawaii. In November 2010, in Christchurch, New Zealand and the United States co-hosted the second workshop of the Trans-Pacific Symposium.

As President Barack Obama underscored in his message to delegates at the first Trans-Pacific Symposium, and most recently in unveiling the Strategy to Combat Transnational Organized Crime: Addressing Converging Threats to National Security (July 2011):

During the past 15 years, technological innovation and globalization have proven to be an overwhelming force for good. However, transnational criminal organizations have taken advantage of our increasingly interconnected world to expand their illicit enterprises. Criminal networks are not only expanding their operations, but they are also diversifying their activities, resulting in a convergence of transnational threats that has evolved to become more complex, volatile, and destabilizing.

The theme of this year’s workshop is inter-agency cooperation in combating corruption and illicit trade. Coordination across the region and sub-regional levels through cross-cutting criminal threats such as, for example, narcotics, environmental crime, counterfeits, money-laundering, and corruption can assist us on both a regional and global level to effectively combat cross-border crimes and transnational illicit networks. As the world becomes more interconnected, this kind of cooperation becomes ever more important to fighting transnational crimes.

Among others, the goals that we will be highlighting here in Phuket in the next couple of days are shutting down illicit markets, disrupting and dismantling criminal entrepreneurs and illicit networks via net-centric approaches, threat mitigation coordinated responses, and enhanced capacity-building efforts that strengthen our collective action to combat illicit trade.

Our keynote speakers today will help to inform our understanding on the challenges that we face today across Asia Pacific region and will provide us with ideas and inspiration as we work together in the coming days to continue to strengthen our networks and cooperation to dismantle transnational illicit networks.

Combating Lucrative Illicit Trade and Converging Threats (Session I)

This morning session is about combating illicit trade and projecting the current criminal threat environment across Asia and Pacific. We are honored to have Pierre Lapaque, Chief, Implementation Support Section, Organized Crime Branch, Division for Treaty Affairs, United Nations Office on Drugs and Crime (UNODC); Dr. John Picarell, National Institute of Justice, U.S. Department of Justice; Steve Kleppe, Homeland Security Investigations, U.S. Department of Homeland Security; General Chanwut Vajrabukka, Chief Advisor for Law Enforcement ASEAN-Wildlife Enforcement Network (WEN); and Steven Galster, Executive Director, ARREST Program, Freeland Foundation.

As discussed this morning, and highlighted in recent years in our past trans-Pacific meetings, increasingly sophisticated and organized webs of crime and corruption fuel greater insecurity, instability, and subversion across our economies, threaten our communities, and imperil the health and safety of our people. Three thematic streams in this year’s workshop are: narcotics trafficking (supply and demand side), illicit logging and associated environmental crimes, and counterfeits. These three themes together cost governments and economies tens of billions of dollars each year.

Criminal entrepreneurs and corrupt actors cause significant damage to the world financial system through the subversion, exploi­tation, and distortion of legitimate markets and economic activity. U.S. and international business leaders worry that their firms are being put at a competitive disadvantage by transnational crime and corruption, particularly in emerging markets where many perceive that rule of law is less reliable. The World Bank estimates about $1 trillion is spent each year to bribe public officials, causing an array of economic distortions and damage to legitimate economic activity. The price of doing business in countries affected by transnational crime and illicit networks is also rising as companies budget for additional security costs, adversely impacting foreign direct investment in many parts of the world.

Moreover, as a result of illicit trade, our companies experience a loss of profits due to the availability of counterfeits or gray market distribution; destruction of brand identity and reputation; loss of biodiversity and green growth; and other consequences. Economies across the Pacific face an increasingly unstable investment climate; mistrust in business relationships; and a lack of competitiveness on the world market. Counterfeit pharmaceuticals, pirated software, narcotics, and other compromised consumer goods threaten the health and safety of the communities we have all sworn to protect. 

The convergence of these networks is of particular concern today, as their confluence threatens the interdependent commercial, transportation, and transactional systems that facilitate free trade and the movement of people throughout the global economy. These converging threats jeopardize governance, development, security, and the integrity of markets and supply chains.

Despite demonstrable counternarcotics successes in recent years, narcotics-trafficking remains a serious threat to the health, safety, security, and financial well-being of communities across the globe. The demand for illicit drugs fuels the power, impunity, and violence of criminal organizations around the globe. In addition to dismantling narcotics-trafficking cartels, sustained demand reduction, drug prevention, treatment, and education programs and strategies are important in reducing drug use, drug-related violence, youth involvement in gangs, and other criminal activity.

Environmental crime – from illegal logging and fishing to the illicit trade in endangered species and their parts or dumping of, and illicit trade in, hazardous materials – is a global issue and one that deeply affects the sustainability of communities across the Asia-Pacific region. Countries have begun recognizing this lucrative and expansive industry as a major transnational criminal threat. The enduring threats posed by transnational environmental crimes means that building transparent partnerships across national borders is more important than ever.

This year’s trans-Pacific workshop has launched the Illicit Logging and Associated Trade theme to enhance cross-sector regional cooperation to combat criminal networks illicitly trading in illegally harvested or stolen timber. According to the OECD, illegal logging in developing countries causes losses of revenue in excess of USD 15 billion per year. The proceeds from natural resources that are illegally extracted or harvested enter the global financial system, crippling the potential growth and development of communities and economies.

It is important to reinforce our commitment to strengthening forest law enforcement sectors and criminal justice communities both within and across our national borders. We must take concrete measures to combat illicit logging and associated trade in all three areas: prevention, detection, and suppression.

Counterfeits, including fake medicines, are another profitable area of illicit crimes. Fake, falsified, and dangerous medicines continue to enter our supply chains and markets, with harmful effects on communities, healthcare institutions, and businesses. Fake medicines often contain inactive or toxic ingredients than can increase drug resistance, prolong patients’ suffering, and even cause death. We must ensure that only safe medicines enter our markets, homes, and health care facilities in our economies.

We must ramp up efforts to investigate and prosecute the criminal actors who produce and sell illicit goods such as counterfeit medicines, while we simultaneously strengthen the integrity of our legitimate supply chains.

We must confront criminal entrepreneurs and illicit market actors that navigate between licit and illicit worlds, tainting supply chains and compromising the integrity of our markets and institutions. Moreover, opaque supply chains, compromised markets, and the corruption that accompanies illicit trade hurt our legitimate businesses; diminish brand identities, reputations, and returns on research and innovation; and increase operating costs and investment risks to all market investors.

We must continue to deny safe haven to kleptocrats and criminal entrepreneurs around the world, bar their illicitly-acquired assets, and strongly signal that continued theft from our economies will not be tolerated. Following illicit financial routes must be an integral part of our strategies to deny criminals and the respective networks access to channels to launder their illicit wealth.

Depriving the networks of their profits and funding is one of the most effective ways to deter them. This requires a holistic, comprehensive anti-money laundering regime with the ability to trace, freeze, and seize assets related to illicit financial flows.

From narcotics to environmental crimes to counterfeits, criminal networks are not only expanding their operations, but are also diversifying their activities, resulting in a convergence of transnational threats that have evolved to become a more complex, multi-dimensional network. Criminal organizations and terrorist groups are increasingly forging alliances of convenience for logistical and financial support at nodes around the world. The convergence of these networks results in the need for cross-cutting licit networks and cooperation among agencies to partner together to combat and dismantle criminal networks. 

Our discussion today will bring a sharper focus by examining the threats across the Asia-Pacific region, including the evolution of cross-border threats; the trends and conditions that allow international organized criminal networks to threaten the collective interests of jurisdictions across the Asia-Pacific by leveraging the global illicit hubs and routes to advance their criminal enterprises; and the fault-lines that are being exploited and bring together criminals, facilitators, black market profiteers, terrorists, and other illicit actors from across the globe.

Concluding Remarks (Day 1): Transforming Partnerships Across the Asia-Pacific Region to Combat Transnational Crime and Corruption

Over the past several years -- from Singapore to Sendai and from Honolulu to Christchurch -- and now this week here in Phuket, communities across Asia and the Pacific recognize the harms posed by transnational criminal and illicit networks.

The Phuket workshop continues to advance the strategic objectives from the inaugural Trans-Pacific Symposium on Dismantling Transnational Illicit Networks hosted by the United States in Hawaii in November 2009, and co-organized by the governments of Australia and New Zealand, and which brought together 25 economies from Asia, Latin America, and the Pacific Islands, as well as senior representatives from international organizations such as the Asia Pacific Economic Cooperation (APEC), Association of South East Asian Nations (ASEAN), the Pacific Islands Forum (PIF), Organization of American States (OAS), the Asia Pacific Group on Money-Laundering (APG), INTERPOL, the World Customs Organization (WCO), and the United Nations Office on Drugs and Crime (UNODC).

New Zealand and the United States co-hosted the second Trans-Pacific workshop in November 2010 in Christchurch, New Zealand, which highlighted the importance of inter-regional partnerships to combat transnational criminal threats and illicit networks including by sharing information and best practices in regional challenges such as narcotics trafficking, counterfeit medicines, trafficking in persons, illegal logging, money laundering, and corruption that facilitates illicit trade.

As APEC economies meet in Hawaii on November 8-13, 2011, for the APEC Leaders’ Summit, we must continue to fulfil the commitment made in 2010 in Yokohama, Japan, by APEC leaders to leverage collective action to combat corruption and illicit trade by promoting clean government, fostering market integrity, and strengthening relevant judicial and law enforcement systems. APEC leaders continue to encourage member economies to dismantle corrupt and illicit networks across the Asia Pacific region.

As APEC Chair of the Anti-Corruption and Transparency Experts Working Group (ACT), we are partnering with other APEC sub-fora and the international community to spearhead efforts to investigate and prosecute the illicit actors who produce and sell harmful counterfeits and traffick illicit trade, while simultaneously strengthening the integrity of our supply chains, as well as our global financial system. We are also working with APEC senior officials to launch an APEC public-private partnership to combat corruption and illicit trade and dismantle illicit networks at every link in affected supply chains and prosecute criminal entrepreneurs who arbitrage weak and corrupt law enforcement systems and exploit internal border controls for illicit gain and enrichment.

At the APEC September 2011 Third Senior Officials Meeting in San Francisco, investigators, prosecutors, and regulators, from the U.S. Department of Homeland Security, including Homeland Security Investigations, the U.S. Department of Justice, the Federal Bureau of Investigation, the U.S. Food and Drug Administration, and others, coordinated with their APEC counterparts by organizing an APEC workshop on Investigating and Prosecuting Corruption and Illicit Trade: Stemming the Flows of Counterfeits and Dismantling Illicit Networks to impart best practices, law enforcement techniques, share case studies, and explore tools that can equip APEC economies to strengthen their resiliency, mitigate vulnerabilities, dismantle transnational illicit networks, and strengthen integrity in supply chains.

Finally as noted this morning, in July 2011, the White House released the Strategy to Combat Transnational Organized Crime: Addressing Converging Threats to National Security (, which aims to transform partnerships globally to protect our economies from the destabilizing influence of transnational criminal networks and their corruptive power.

Leveraging the Presidential Strategy as a roadmap, the United States will work with our partners in Asia and the Pacific and beyond to protect strategic markets and maintain the integrity of the global financial system and disrupt transnational illicit networks.

By fighting networks with networks and reducing arbitrage opportunities through the harmonization of our regulatory and law enforcement efforts, we can dismantle the criminal opportunity structure at every node.

We are committed to shutting down illicit markets, putting criminal entrepreneurs and kleptocrats out of business, and combating converging threats and networks with effective coordination between investigations, prosecutions, and intelligence-based regional policing.

As also reflected in the National Strategy, the United States will continue to leverage inter-regional partnerships and networks across the Pacific and Atlantic to mobilize greater collective action, joint cases, and common approaches with our international partners to combat transnational criminal threats.

We hope that our dialogue this week is fruitful and advances our common mission to confront the security challenges that we face together.

Thank you.

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