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Illegal trade impedes economic growth

By James Wahome | Updated Fri, February 24th 2017 at 00:00 GMT +3

Last December, customs officials intercepted containers with concealed cargo worth Sh75 million. The officers discovered 24 forty-feet containers of concealed new garments and milk powder at the Port of Mombasa in the largest single seizure by the Kenya Revenue Authority.

Out of the 24, some 21 contained new garments and shoes disguised as cold rooms being imported by horticultural farms. Three containers had a consignment of milk powder disguised as flasks and sewing machines.

The detection was due to joint collaboration with other state agencies working together in combating these smuggling syndicates. The Kenya Revenue Authority used special non-intrusive scanners to detect the real identity of the consignments.

Major ports of entry in Kenya now have the non-intrusive scanners that detect and identify pre-cursor chemicals, strategic trade commodities as well as special category goods.

Smarter gadgets like the scanners have made it easier for customs officials to detect illegal goods coming into the country. Nonetheless, it is important to note that maintaining the delicate balance between facilitating legitimate trade flows while concurrently deterring those that are illicit is a complex operational task for any customs and border control agency. The trafficking of endangered species and animal parts such as ivory, tiger skins, and rhino horns is estimated to be a $19 billion per year trade.

Due to the secretive nature and lack of verifiable data on illicit trade, it is difficult to calculate with absolute precision the market size of this trade. However, most customs, border and law enforcement officials, policy makers, and academicians agree that illicit trade results in major financial and social costs to the global society.

Modern-day smugglers use novel, flexible, stealthy logistical methods, assets, and systems to smuggle illegal goods across national borders in order to avoid the risk of detection and apprehension. From a policy perspective, illicit trade tests the governance structures that regulate the global economy.

The global nature of the economy (including illicit trade) has forced customs and law enforcement agencies to collaborate and share intelligence on an international level. Globalisation means that foreign ministries have become increasingly central players in what had been domestic policy issues.

The complexity of managing the facilitation of legitimate and legal trade while concurrently preventing illicit trade can be extremely demanding. The challenges presented by transnational smugglers in the form of physical border management of transportation geography with resource constraints, the interdiction adaptation cycle between customs/border enforcement and smugglers, and issues related to customs and border control agencies’ coordination require serious consideration about interactions between not just single agencies but about how networks of agencies interact, gather intelligence and disseminate critical information about illicit traders and cross-border smuggling operations.

The impact of illicit trade also brings about risks to economic growth and sustainable development. Illicit trade and illicit markets are providing not only a safe haven and exploitable sanctuaries for illicit forces but also illicit liquidity for corrupt officials. Consequently, illicit trade and the wide availability of illicit liquidity prevent fair and open markets from reaching their full economic potential and threaten state sovereignty.

Modern Customs should not only collect revenue but also play two other important national roles: expediting cross-border trade to promote economic development and protecting society by preventing international trafficking in illicit goods.

The use of non-intrusive inspection technology by KRA’s customs and border control department has far reaching implications on both revenue collection and national security, with the system enabling KRA to detect any dangerous devices that maybe concealed in import cargo.

At current capacity, the scanners are able to clear over 500 containers a day. The system works in tandem with X-ray cargo scanners already deployed at major Airports in the country.

Kilindini Port currently has three working scanners for import cargo, an additional scanner at the port’s Kapenguria service area that scans import and export cargo, and a mobile scanner at the New Container Terminal which scans imported cargo.

The Authority has further received a donation of three scanners from the China Government to support the existing scanners.

With the growing volumes of trade and limited personnel, the project will ultimately be expanded to increase the scanning capability of the system to enable it clear 1,500 containers per day, as well as reduce duplication of activities and queues, which will improve the global competitiveness of the port.

The non-intrusive scanners, through identification and control of pre-cursor chemicals and strategic commodities will combat global terrorism, ensuring safe and secure trade supply chain.


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