Curbing illegal trade at ports of entry key to economic growth

A ship docks at the Mombasa Port. file photo | nmg 

By JAMES WAHOME

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Summary

• Illicit trade and the wide availability of illicit liquidity prevent fair and open markets from reaching their full economic potential and threaten State sovereignty as well as risk growth.
• This trade also causes enormous costs, such as the corruption and destabilisation of society, harmful effects of drugs, lost productivity and other social costs.
• The complexity of managing the facilitation of legitimate trade while preventing illicit trade can be extremely demanding.

Last December, customs officials intercepted containers with concealed cargo worth Sh75 million.

The officers discovered 24 40-feet containers of concealed new garments and milk powder at the Mombasa port in the largest single seizure by the Kenya Revenue Authority (KRA).

Out of the 24 containers, 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 this smuggling syndicates. The KRA 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 such as 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 legal trade flows while 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 a 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, policymakers, and academicians agree that illicit trade results in major financial and social costs to 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 trade while 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.

Illicit trade and the wide availability of illicit liquidity prevent fair and open markets from reaching their full economic potential and threaten State sovereignty as well as risk growth.

This trade also causes enormous costs, such as the corruption and destabilisation of society, harmful effects of drugs, lost productivity and other social costs, including those associated with the dumping of toxic wastes, poaching of endangered species, risking human lives and public health due to counterfeit drugs flooding the market.

All these illicit trade activities have an economic effect, as they divert money and other resources from legitimate businesses.

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 global trafficking in illicit goods.

At current capacity, the scanners are able to clear more than 500 containers a day. The system works in tandem with X-ray cargo scanners deployed at major airports, Kilindini port, Consolebase CFS and inland container depot in Embakasi Nairobi.

The KRA has further received a donation of three scanners from the Chinese 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.