​KEY FINDINGS 

​​Supply chain hotspot: Online platforms​​

​Illicit trade on e-commerce platforms is a significant concern because traffickers can exploit online channels to gain easy access to markets. All the sectors under review are impacted, except oil, forestry and fisheries due to their nature or perishability.

Illicit trade dealings which were once characterized by direct exchanges between sellers and buyers have now shifted online, with payments made through mobile banking apps and goods delivered by courier/postal systems. Traffickers exploit and operate over a wide array of online channels such as business-to-business exchanges, auction sites, e-commerce sites, social media networks and message boards. The challenge is made more acute by the fact that even when an illegal item is removed from a site, it often appears elsewhere within a short time.

Traffickers notably benefit from the anonymity and minimum exposure that online activities provide, allowing them to avoid controls and to ship considerable amounts of products directly to consumers. The ability of sellers to hide their identity and misrepresent their products is a particularly attractive option, providing them with a relatively ungoverned point of entry into even the best regulated markets.

The sending of unsolicited bulk messages to a very large number of e-mail accounts (i.e., spamming) plays a crucial role in the advertising/distribution channels for illicit goods, especially in relation to counterfeit medicines.

Fraudulent advertising is rapidly emerging as a new trend, driving unsuspecting consumers to third party illegitimate e-commerce sites. Since 2017, many popular international brands have been targeted by fraudulent adverts on Instagram and Facebook, some of which receiving up to a quarter of a million views before they were detected.

In most of the sectors under review, traffickers exploit the features offered by online messaging apps (e.g., WhatsApp, Telegram) to create networks connecting buyers and sellers or directly contacting end customers for illegal sales – all usually done with minimal transparency as to the identity and location of those involved.

Traffickers also exploit the fact that online shoppers cannot physically inspect the products ahead of their purchasing decisions and that they are usually required to pay in advance of delivery. Consumers are further confused when counterfeiters post images of genuine products or offer products at extremely low prices. The fact that online platforms enable the sale of products with the involvement of fewer intermediaries and lower overhead costs was reported as a factor enabling traffickers to offer significantly lower prices.

When illicit online transactions are underpinned by use of anonymous payment systems, the challenges in detection/investigative efforts multiply. The anonymity offered by cryptocurrencies such as Bitcoin makes the financial movements connected to illegal online transactions extremely difficult to follow, if not impossible. Other trusted and protected payment methods such as Paypal are exploited by more than 35 percent of counterfeiters.
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Weak regulatory frameworks for commercial transactions and limited online policing by the ecommerce and social platforms are reported as the primary enabling factor for traffickers to exploit Internet-based platforms over traditional outlets and face-to-face commercial exchanges.

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