Combating illicit trade a key pillar of Belgium’s anti-radicalisation strategy says deputy prime minister Jan Jambon

European governments yet to grasp scale and nature of so called underground economy, conference warned.

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

21 Feb 2017

Is the trade in illicit goods helping to finance terrorist organisations? Photo credit: Press association

A Brussels conference has been told that the lucrative trade in illicit goods is helping to finance terrorist organisations such as Islamic State.

Speaking on Tuesday at a conference on counterfeit trade, Belgium’s deputy prime minister Jan Jambon said the “shadow economy” had helped finance those behind the terrorist atrocity in Brussels nearly 12 months ago.

The event was also told that the international community is “losing the battle” against the trade in illicit goods and that European governments “do not get” the scale and nature of the problem.


In a keynote speech, Jambon said, “An enormous illegal economy has been created worldwide, stimulating a tangle of obscure flows of money, allowing terrorists and their direct accomplices to organise themselves in a kind of parallel universe.”

He added, “If you check their background, you will notice that terrorists often indulge in criminal activities at a very young age, often in the shadow economy.

“They make friends who help them later on to survive financially and to bear the cost of their terrorist plots. But they also learn the tricks of the trade: “how to organise your business in such a way to remain, as long as possible, out of sight of the police and security enforcement agencies”

Jambon said, “Of course, not all undeclared workers, traffickers or dealers in counterfeit products end up as terrorists. But – often without realising it themselves - the profit of their lucrative little business is what allows terrorists to execute their plans.

“Due to the enormous amount of money that can be earned in the shadow economy, people start to think that ‘everything is possible and that everything is allowed’.

He told the conference, “It’s not a coincidence that terrorist cells emerge at places where illicit trade is thriving. Because of this, the municipality of Molenbeek in Brussels appeared in a bad light worldwide. A violent extremist such as Abdeslam Salah was able to hide for months in the centre of this borough while police forces were searching frenetically for him.

“In districts such as Molenbeek, the parallel economy, at some point, started to become so predominant that terrorism has been covered up both literally and figuratively, and impunity has become the norm.”

The minister said that the battle against the underground economy was “one of the great pillars of Belgium’s so-called “Canal plan”, set up by the government after the attacks in Paris and Brussels to fight terrorism and violent extremism in nine districts in and around the Belgian capital.

“Districts that are all dealing with more or less similar criminal phenomena and have become breeding grounds for jihadism,” he said.

Jambon said work on the plan is “far from complete” but after a year Belgium is on the “right track.”

He added, “Due to a substantial increase in the number of police officers, law and order has gradually been restored in the streets. Obscure “non-profit organisations” used as a cover for various criminal activities, are being dealt with. We are also tackling drug trafficking, arms trafficking and trafficking in false documents and we specifically target the illegal economy.”

To show that it was serious, the federal and regional governments recently approved a national security plan. “In this plan, we put the emphasis on the battle against the illegal economy,” Jambon said.

The conference was told that the trade in illicit alcohol was a particularly “substantial” problem and another notable speaker, Paul Skehan, the director general of spiritsEurope, asked, “The question is: are we winning or losing the battle? At present, I suspect we are losing and one of the problems is that European governments do not get the scale and nature of a problem which is a multi-headed beast.”

The conference, organised by The Economist group, heard the results of the World Economic Forum’s global agenda council on illicit trade which estimated that the shadow economy is worth $650bn with the latest figures on counterfeiting alone predicting an increase to $1.77 trillion. It found that global value of digital piracy in movies, music and software in 2015 was $213bn.

Attendees heard that the illicit trade in cigarettes, alcohol and other consumer goods “distorts international trade, harms the health and safety of consumers, imposes heavy burdens on regulatory and enforcement organisations, and is one of the most significant sources of revenue for transnational criminal networks.”

Brendan Lemoult, anti-illicit trade vice president with Japan Tobacco International (JTI) said almost all industries are affected by counterfeiting, contraband and intellectual property crime in the thriving underground economy.

He said, “This is a trade that knows no national borders and so therefore is something that needs a global response with public and private sector cooperating more closely with law enforcement agencies.”

Lemoult however, also pointed to “major successes” in combating the trade, saying that as a result of information supplied by JTI some 5000 websites peddling counterfeit tobacco items had been removed, over 50 counterfeit raids were carried out and 2bn illicit cigarettes had been seized in the past two years.

Paul Maier, director of the EU observatory on infringement of IPR, agreed that up-to-date data and more cross-border information sharing was needed to develop a “clearer” understanding of illicit trade and how to combat it more effectively.

“Cooperation and information sharing is far from perfect and is the big challenge,” he said.

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