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Trust Enabler for Global Trade

The illicit trade in consumer products not only represents a serious loss of tax revenue for governments, it can pose public health risks and undermine consumer confidence. Product authentication, allied to secure authentication and traceability technology, is a valuable tool for governments, enabling efficient tax collection and promoting public confidence.

Three distinct but inter-related forms of illicit trade co-exist: Counterfeiting of legitimate products; Smuggling of genuine products; Evasion or under-reporting of production to avoid tax obligations. 

 
Although the illicit trade market may be popular with some consumers, it is far from a victimless crime: governments lose tax revenue, public health risks increase and confidence falls among consumers abused by sub-standard or dangerous products.
 
Illicit trade in goods and services:
  • Damages economic development and supports corrupt practices
  • Weakens government policies and the rule of law
  • Helps to finance organised crime
  • Undermines investment in industry and the business of legitimate traders
 
Yet the demand for cheaper products has developed large illicit markets worldwide. As a result, governments in all parts of the world have started to impose anti-counterfeiting, anti-diversion and anti-smuggling control mechanisms for tobacco, alcohol and pharmaceutical products with tracking, from point of production to final point of sale.

Their goal is to increase the visibility of counterfeiting, smuggling, and activities like diversion into 'grey' markets. To achieve this objective, governments working with SICPA can implement proven security excise tax stamps and security banderols, unique coding, production control, product authentication features, and secure track & trace.

 
To be really secure and effective, the solution needs to combine sophisticated material-based security and IT-based security. Tax stamps are only likely to be fully effective if they are supported by digital data and a central database that holds detailed information on every product - down to the level of a single pack or bottle.
 
International counterfeiting and smuggling will continue to be difficult to address unless national databases can share reliable information in a secure and timely manner. The information has to be available where and when required so government agents can effectively control production, authenticate products, tackle illicit trade, collect taxes due and protect citizens’ health.
 
 
Illicit Trade