Is free trade enabling cyber crime?

What is the state of organized crime in the digital age? Internet frauds exploiting banking, commercial and financial transactions continue to threaten individuals and enterprises. Corruption, tax fraud and money laundering cannot be easily detected or deterred due to difficulties in identifying the real beneficial owner of the criminal transactions. The enablers of these activities are often professionals who sell opacity services and counterfeiters who take advantage of the non-regulated efficiency of free-trade zones.

Public attention to organized crime is mostly limited to homicides and headline arrests of kingpins. Online, however, silent organized crime has infiltrated legitimate economies without the violent muscling that the media would cover. The consequences of its existence nevertheless come at a high price for nations. The global annual cost of cybercrime is estimated at US$ 388 billion.

There is a growing need to inform journalists and policy-makers that silent organized crime is a serious threat which needs to be exposed and tackled. Legislatively, the best way to begin is by reducing the vulnerabilities that organized crime exploits. However, much like the debate over legalizing drugs to reduce the opportunities of cartels, it is uncertain which vulnerabilities enabling organized crime could be reduced and which would be inadvertently reinforced. Cybercrime is constantly evolving with new technologies and thus adaptable. The asymmetries in financial regulations, such as the beneficial owner issue are accidental enablers. Free-trade zones lack regulations, producing unforeseen opportunities for enablers.

More effective measures must be taken against the elements facilitating modern-day organized crime. The Global Agenda Council on Organized Crime is releasing a report later this week which offers recommendations tackling the problem.

Author: Ernesto U. Savona is Director of Transcrime and Vice-Chair of the World Economic Forum’s Global Agenda Council on Organized Crime.

Image: A view of the Global Response Centre of the International Multilateral Partnership Against Cyber Threats (IMPACT). REUTERS/Bazuki Muhammad