Definition of illicit trade

For the purpose of this survey, “illicit trade” means any practice or conduct prohibited by law relating to the production, shipment, receipt, possession, distribution, sale or purchase of goods or services, involving a transnational element, including any practice or conduct intended to facilitate such activity.

More detailed sector specific definitions are presented below:
 
Illicit trade in agrochemicals include: obsolete or banned unauthorized pesticides; untested, unregulated, or unlicensed pesticides; unauthorized imports; counterfeit and fake pesticides; relabeled or mislabeled pesticides; and refilled pesticides containers.
 
Illicit trade in the agri-food sector comes in many forms and manifestations, ranging from economically-motivated adulteration (EMA), commonly referred to as food fraud, to large scale smuggling of agriculture products. Food fraud is the intentional sale of sub-standard food products or ingredients for the purpose of economic gain. It impacts many different types of foods, including meat, dairy products, fish and seafood, fruit juices, oils, honey, spices and wine. Common types of food fraud include substitution or dilution of an authentic ingredient with a cheaper product (such as replacing extra virgin olive oil with a cheaper oil), flavor or color enhancement using illicit or unapproved substances (such as unapproved dyes), and substitution of one species with another (such as the European horse meat scandal).
 
Illicit trade in alcohol encompasses a wide variety of illegal activity that is typically characterized as:

• Contraband/Smuggled Alcohol: Alcohol with original branding that has been illegally imported/smuggled into a jurisdiction and sold, evading tariffs/customs. This Includes beverages brought across the border via organized smuggling or in excess of the applicable traveler’s regulated allowance. Smuggling of alcoholic beverages mirrors the illicit tobacco market and petroleum fuels theft, where criminals move products across borders with the express purpose of evading the payment of excise duties or profiting from tax arbitrage by reselling product in higher tax markets.
• Counterfeit Alcohol: Fraudulent imitations of legitimate branded products, including refilling, falsification and tampering. These beverages infringe the intellectual property rights of legitimate producers and present brand reputational risk and potential liability. It is often produced in illicit factories and sometimes substitutes lower grade alcohol not intended for human consumption such as denatured ethyl alcohol.
• Illicit Artisanal: Alcoholic beverages produced following artisanal practices, including home production. Artisanal alcoholic beverages are considered illicit if they are produced for commercial purposes, and if their production and/or sale violate local law.
• Tax Leakage: Legally produced alcohol beverages on which the required excise tax is not paid in the jurisdiction of production.
• Non-conforming Alcohol: Products that are not compliant with production processes, guidelines, or labeling legislation. Includes products produced with industrial alcohol and products not meant for human consumption but diverted to the market for alcoholic beverages (i.e., pharmaceutical alcohol, mouthwash, perfume.)

Counterfeit and Piracy: 

• A counterfeit good is an unauthorized imitation of a branded good. The official definition can be found in the enforcement section of an agreement on intellectual property rights negotiated in the World Trade Organisation, known as the TRIPS Agreement: "Counterfeit trademark goods shall mean any goods, including packaging, bearing without authorisation a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation." 
• Piracy consists in making an unauthorised exact copy–not a simple imitation–of an item covered by an intellectual property right. It is officially defined by the TRIPS Agreement as: "Pirated copyright goods shall mean any goods which are copies made without the consent of the right holder or person duly authorised by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the law of the country of importation". 

Illegal logging and illicit timber trade: The International Union of Forest Research Organizations (IUFRO) broadly defines illegal logging and related timber trade as including “all practices related to the harvesting, processing and trading of timber inconsistent with national and sub-national law.” This definition also may be extended to include violations of ratified international treaties and conventions. Such practices include, for instance, operating under a license that has been obtained illegally (e.g., involving corruption or collusion), logging in protected areas, exceeding permitted harvest quotas, processing logs without the necessary licenses, tax evasion and exporting products without paying export duties.” The definition also encompasses “related trade” when timber-based products are exported or imported in contravention to import or export laws.
 
Illegal, unregulated and unreported fishing (IUU) refers broadly to fishing activities that contravene regional, national or international fisheries conservation or management measures, or occurs outside the reach of these laws and regulations. IUU consists of the following distinct but related elements: 

• Illegal fishing refers to activities conducted by national or foreign vessels in waters under the jurisdiction of a State, without the permission of that State, or in contravention of its laws and regulations. It also may include violations of the laws, regulations, and conservation and management measures adopted by a fishing vessel’s flag State; and violations of national laws or international obligations, including the obligations of cooperating states to relevant regional fisheries management organizations (RFMOs). 
• In practical terms, illegal fishing can include: fishing without a license; fishing in a closed area or marine protected area (MPA); under-reporting catches; keeping undersized fish; using prohibited fishing gear types; or illegally transshipping fish. 
• Unreported fishing refers to fishing activities (i) which have not been reported or have been misreported to the relevant national authority in contravention of national laws and regulations; or (ii) undertaken in the area of competence of a relevant RFMO which have not been reported or have been misreported in contravention of the reporting procedures of that organization. 
• Unreported fishing includes cases where fishers may only report a portion of a catch so as to fall within quotas, may fail to report the harvest of nontargeted species, or simply avoid reporting all together. Examples include keeping two fishing logs: an official log for the inspectors and a ‘confidential’ log for the owner. Fishers also may falsely record vessel locations or offload fish at ports with low regulatory and inspections standards, so called ‘ports of convenience.’
• Unregulated fishing is a broader term, which refers to fishing activities conducted by vessels without nationality, or those flying the flag of a country not party to a RFMO within the jurisdiction of that RFMO, or more generally fishing in a manner which contravenes the regulations of the RFMO. This also includes fishing in areas or for fish where there are no applicable conservation or management measures, and where such activities are conducted in a manner inconsistent with State responsibilities for the conservation of living marine resources under international law.

 
WHO definition of illicit pharmaceuticals: 

• Substandard: Also called “out of specification,” are authorized medical products that fail to meet either their quality standards or specifications, or both.
• Unregistered/unlicensed: Medical products that have not undergone evaluation and/or approval by the National or Regional Regulatory Authority (NRRA) for the market in which they are marketed/distributed or used, subject to permitted conditions under national or regional regulation and legislation.
• Falsified: Medical products that deliberately/fraudulently misrepresent their identity, composition or source. As such, when the term “counterfeit” is used broadly, this refers to medicines that are (a) deliberately produced with substandard quality; (b) fraudulently labeled with respect to their identity/origin; or (c) otherwise tainted, adulterated, or made ineffective or harmful. Fundamentally, counterfeit medicines are neither regulated or quality controlled and therefore should be expected to be inferior as they move outside the safety of established, regulated supply chains.

 
Illicit trade in tobacco generally includes “any practice or conduct prohibited by law which relates to production, shipment, receipt, possession, distribution, sale, or purchase of tobacco products including any practice or conduct intended to facilitate such activity".
 
Trafficking in persons: According to the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, trafficking in persons is defined as ”the recruitment, transportation, transfer, harboring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation. Exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labor or services, slavery or practices similar to slavery, servitude or the removal of organs.”