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This article is written by Apurv Umredkar. This article deals with top most profitable/lucrative business in the world. 

Introduction

With the advent of LPG (Liberalisation, Privatisation, and Globalisation) the world has escalated more and more deeply into terms of business and commercial success. Every now and then, we get to know a new startup or industry being established and the existing ones stepping up their overall production, distribution and profit-making capacities. As every coin has 2 sides, so is the case with the business world. The growth and development we generally measure accounts from legal business.

As the commercial boom increased the pace of development, so did the illegal business activities causing harm to our government, economy among others in numerous ways. It’s not peculiar that illegal businesses are one of the most profitable business ventures in the world today. The money generated in illegal industries stays underground and does not appear in the legitimate economy and hence, it is called black economy or shadow economy. [1] Because of the unreported and unregulated money, it is difficult to estimate the value of illicit industries globally. According to a report released by Global Financial Integrity [2] (a non-profit organisation focused on curbing the flow of illegal money) named Transnational Crime and the Developing World [3], worldwide illegal cash proceeds are estimated at a whopping $1.6 trillion to $2.2 trillion annually. The report analysed the amount by taking account of various categories of illegal crimes – drug trafficking being the most profitable, also being the most dangerous and violent due to the commodity it deals with. Despite being several national and international attempts.

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Illegal lucrative business ventures 

Organized crime has been there in the world for decades and its effects are deeply acclimatized into the social, political and cultural fabric of various nations. There are a plethora of illicit activities performed systematically by criminal enterprises like drug trafficking, illegal logging, illegal crude oil trade, human trafficking, illegal wildlife trade, illegal arms trafficking, illicit fishing, illegal art trade and counterfeiting. These are the sectors where organized crime is most active in. Some are focused on a single activity, while others perform multiple crimes at once due to their organisational complexities. So without further ado, lets take a look at each of them one by one:

Drug Trafficking – Drug trafficking is the most profitable and remarkable illicit activity in the crime world. The reason being the substance it deals with (cocaine, heroin, cannabis etc) are considered as one of most valuable commodities in the world. The operation includes right from cultivation, processing and manufacturing to distribution and sale of substances overseas. The task is not completed here. The daily cash proceeds are also brought back by cartels either physically or converting cash into legitimate assets. The cartel also invest heavily into legitimate economies like real estate, crooked banks, car dealerships etc. 

The total value of drug trafficking worldwide is estimated to $426 billion to $652 billion annually constituting for almost 1% of the World GDP – $142 trillion. Almost every organized crime group is involved in drug smuggling either directly or indirectly. The reason is the insatiable demand of drugs worldwide. The United States is the world’s largest consumer of illegal narcotics. The majority of the drugs smuggled include cocaine, heroin, marijuana, methamphetamine, fentanyl, etc. 

The drug cartels have set up dedicated narco routes across the world through which they daily smuggle tons of drugs which include cocaine, heroin, cannabis, LSD, ecstasy, methamphetamine. Some of these narcotics have their own GI like cocaine is found in latin america, mostly in Colombia, Peru, Bolivia and Chile. Mexico is one of the biggest cannabis producing countries, hence the name ‘marijuana’. Afghanistan[4] is the largets producer of opium in the world with more than 90% share in illicit opium growth. One of the worst affected countries are the United States, Mexico, Brazil and Colombia. In 2006, the then Mexican President Felipe Calderon declared an all out war on drugs. In any country, drug trafficking attracts one of the most stringent punishments. The reason behind this is of all the organised crime activities, drug trafficking has caused greater harm than any other illicit business. Not only it kills people from its drugs but also various innocent people become victims of violence and bloodshed caused by drug cartels. We can surely estimate the level of violence from the fact that the above mentioned countries are one of the most dangerous countries in the world. 

Illegal logging – The practice of harvesting, processing, transporting, buying and selling of timber products in contravention of local laws or governing regulations. It includes extraction without permission, cutting down of protected species and extraction of timber in excess of agreed limits. It is often the result of corruption, poor governance and lax law enforcement authorities. The effects of illegal logging are hugely devastating and multifarious causing damage to forests, environment, local communities and countries producing it. It also leads to deforestation, misplacing of local livelihood, destruction of the natural wildlife habitat and loss of biodiversity. According to the World Bank [5], illegal logging results in loss of tax revenue upto $ 5 billion. The unreported and unregulated timber product reaches the market and is made available for price cheaper than legal timber. As a result, people often end up buying illegal timber, which leads to additional loss of $ 10 billion to the legal timber industry. The total forest area [6] of the world is 4.06 billion hectares out of which 20 million hectares of forest were illegally converted into agricultural land from 2000 to 2012. Majority of the world forest cover is found in the Russian Federation, Brazil, Canada, United States and China and Indonesia. Of these Brazil and Indonesia include the most heavily deforested regions – 75% of the illegally cleared forest area. 

Illegal logging is carried out by organized crime. There are specific Timber mafia also operating in the dense jungles indulged in widespread crime, corruption, bribes, etc and are no less than ruthless drug cartels in terms of bloodshed, violence and corruption. The global illegal timber trade values at $30 billion to $100 billion dollars annually[7]

Illegal Crude Oil Trade – Oil often referred to as Black Gold. is considered as one of the leading energy sources in the world. It is also one of the most valuable commodities in the world – value is even more than all the valuable raw materials combined in the world – an amount worth $1.7 Trillion[8] annually. Due to legal and procedural complexities involving such a precious commodity, it is prominent that there is a black market dealing extensively with oil extraction, processing, distributing and sale of crude oil. Every year $133 billion worth of fuel is stolen or adulterated throughout the world. The key players involved in this dirty business are none other than Mexican drug cartels, the Islamic State of Iraq and Syria, the Italian mafia, Libyan militant organisations and Nigerian rebels. The countries where most of the illegal oil trading is done are Nigeria, Mexico, Iraq, Russia and Indonesia. 

Nigeria loses nearly $18 billion a year due to pipeline tapping and illegal production by organised crime groups. Although not much in the limelight, this illegal business is also booming day by day and creating various hurdles and problems for growth and development of the countries. The money generated by oil trade is often put to use for global terrorism, civil wars and the creation of tension in sophisticated and sensitive areas. Various countries which do not have any direct link with oil trade also become victims as a consequence of trade. The fuel theft is done by various methods like tapping pipelines, illegal bunkering, ship to ship transfers, adulteration, armed thefts, smuggling and laundering. It has a devastating effect on corporate profits, government revenue, environmental damage and price increase in oils. 

Human trafficking – Human trafficking is by far the most inhumane, barbaric, and heinous crime committed by traffickers and criminal organisations. It involves the trade, buying and selling of human beings for the purpose of forced labour, slavery, commercial sexual exploitation and illegal trade of organs worldwide. It is considered as a grave violation of human rights since it infringes and abuses the basic right to live, freedom and dignity of a person. Forced marriage also comes under the ambit of human trafficking. Ethnic minorities, child workers [9] and marginalized groups are the most affected sections of society. These sections are automatically drawn to this black market due to economic crisis, political instability and hope for the betterment of life. 

The most common form of human trafficking is commercial sexual exploitation. Russia, China, Iran and Venezuela are the most affected countries regarding human trafficking. According to the International Labour Organisation [10], trafficking generates $150 billion annually. As of September 2017, 24 million people are victims of human trafficking most of which are women and minor children. There are various anti-human trafficking treaties and conventions against this illegal trafficking like Protocol to Prevent, Suppress and Punish Trafficking in Persons[11], an international agreement under the UN Convention against Transnational Organized Crime (CTOC)[12], Convention on Action against Trafficking in Human Beings[13] and Convention on Protection of Children against Sexual Exploitation and Sexual Abuse under the Council of Europe, Universal Declaration of Human Rights[14], Convention on the Elimination of All Forms of Discrimination Against Women, Convention on the Rights of the Child, United Nations Convention against Torture. 

Illegal Arms Trafficking – The illegal arms trade is a global business which involves the unreported or unmarked selling and buying of weapons, arms and ammunition often for fueling other illegal activities such as by the organized crime groups, drug cartels, insurgent groups and mafias. Although spread across the whole world, the arms trade is concentrated in specific places like Iraq, Syria, African countries which are affected by violence, crime, poverty and failure of constitutional machinery. The illicit dealing of arms directly results in civil wars, regional conflicts and other inhumane and inhospitable conditions for citizens of all the countries in the world. This trade is generally considered as a side-business for criminals involved in any type of illegal activity. Stronghold and better grip in arms and weapons is very much essential for crime groups to take over and be ahead of their rivals in the nasty underworld. That’s why they need to upgrade their arsenal every now and then so as to get the latest ammunition. 

There are categories of weapons distributed – (I) Small Arms which include revolvers, pistols, rifles, machine guns and assault rifles. (II) Heavy Arms which include mounted grenade launchers, anti-aircraft guns, anti-tank guns, recoilless rifles. (III) Bombs, explosives, detonators and other heavy bombs. The reason behind the massive expansion of weapon trafficking is that the arms are traded both legally and illegally and this makes it hard to trace the illegally purchased or sold weapons. Added to it the fact that sometimes the legally produced arms are channelized into the black market due to loose policies, corrupt officials and unreported and unaccounted trading. Of all the categories, small arms are the most trafficked weapons in the global illegal arms trade. The total value to international arms trade is evaluated at $ 1 billion [15]. Although less profitable, arms trafficking is the only illicit operation which serves as a backbone of all other criminal enterprises because without arms and weapons in their arsenal no crime group can survive. 

Illicit Fishing – Although it might feel a bit strange but yes, illegal fishing is one of the most lucrative and prominent crimes related to the sea. Each year millions of tonnes of high value sea creatures such as cod, lobster, salon and prawns are illegally extracted and traded in the black market [16]. Generally, the over-exploited species are targeted by smugglers because of their high value in the market. Illegal fishing is officially referred to as IUU fishing (Illegal, Unreported and Unregulated Fishing) is the summation of illicit activities during fishing committed by fishermen, pirates and other people involved in crime through the sea. It consists of three subcategories namely:

Illegal FishingIllegal Fishing refers to the fishing activities by ships or vessels belonging to a nation other than the one in whose jurisdiction the activity is carried out. Often it is done without due authority, permission or proper prescribed manner as per the law of the land, hence considered as illegal. Fishing more than the permit. According to the definition by the Food and Agriculture Organisation of the United Nations[17], the term ‘Illegal Fishing’ means:

  1. Conducted by national or foreign vessels in waters under the jurisdiction of a State, without the permission of that State, or in contravention of its laws and regulations;
  2. Conducted by vessels flying the flag of States that are parties to a relevant regional fisheries management organisation but operate in contravention of the conservation and management measures adopted by that organisation and by which the States are bound, or relevant provisions of the applicable international law; or
  3. In violation of national laws or international obligations, including those undertaken by cooperating States to a relevant regional fisheries management organization.

Unreported FishingUnreported fishing occurs when criminals harvest the sea-creatures without due accountability or report of fishing to the relevant authorities as per the local laws and procedures during the course of the transaction. It involves preparing false reports, transaction details so as to gain impunity in spite of committing crime. More often it also involves tonnage of quantity more than the permitted or authorized by the law. It is hard to distinguish between the legally and illegally caught fish because of widespread corruption, bribes to relevant officials, lack of legislative action etc. As per the Food and Agricultural Organisation of the United Nations, ‘Unreported Fishing’ means:

  1. Which have not been reported, or have been misreported, to the relevant national authority, in contravention of national laws and regulations; 
  2. Are undertaken in the area of competence of a relevant regional fisheries management organisation which have not been reported or have been misreported, in contravention of the reporting procedures of that organisation.

Unregulated Fishing – This aspect of illegal fishing occurs where there are no strict laws for prevention of the illicit market, no particular legislation or rule prescribed by the competent authority. Although from a legal point of view, unregulated fishing is not a crime, it has several serious impacts on marine life exploiting the already over-exploited creatures more and more. As per the Food and Agricultural Organisation:

  1. In the area of application of a relevant regional fisheries management organization that is conducted by vessels without nationality, or by those flying the flag of a State not party to that organization, or by a fishing entity, in a manner that is not consistent with or contravenes the conservation and management measures of that organization
  2. In areas or for fish stocks in relation to which there are no applicable conservation or management measures and where such fishing activities are conducted in a manner inconsistent with State responsibilities for the conservation of living marine resources under international law.

Today, IUU Fishing is one of the most cumbersome illegal industries in the black market. It has a crippling effect on marine ecosystems, endangering food security, and sometimes lead to other major international crimes. IUU fisheries also lead a great loss and burden on those law-abiding, responsible and honest fishers who follow protocols and rules prescribed in that area. Various principles and standards were introduced like Code of Conduct for Responsible Fisheries for the prevention of illegal fishing and upliftment of marine ecosystems, the depletion of which will cause a massive loss to mankind and living beings.

Illegal Wildlife Trading – As the name suggests, illegal wildlife trading is the unlawful capturing of animals, customizing it as per the demands, and then selling it in the illegal market under uncontrolled conditions for generating billions of dollars of revenue in terms of profit for sophisticated and powerful crime rings. It is not only illegal, but also has devastating impacts on biodiversity, environment, and is among the major reasons of ecological imbalance on the planet. Many helpless animals become a target of the international networks and poachers who don’t have any empathy or towards animals. The wildlife traffickers basically target the animals which are exotic, charismatic, precious and have high resource value among other qualities. The animal simply isn’t valuable for them but it is their body part which makes them a target of poachers.

A variety of wildlife commodities are sold unlawfully like elephant ivory, rhino horns, pangolin scales, tiger bones and skin, rosewood logs. Another reason why wildlife trading is unprecedentedly growing is the demand for these commodities by the ultra-rich, powerful echelons of the society. The possession of these wildlife products is considered as a status symbol among the gentlemen. There are specific places around the globe where this illegal trading is most threatening (which are often called wildlife trade hotspots). These include Africa, Southeast Asia, China, Indonesia and some parts of Mexico. 

According to a UNODC report, the pangolin is the most trafficked mammal on the planet. The practice of poaching animals as a profession and business is also attributed to the social, economic and cultural conditions of poor forest households. With nearly no other occupation to sustain their lives, they are automatically drawn towards the easy money from trafficking. These generally work for the big forest mafias and kingpins. No matter what we do, this wildlife trade isn’t simply gonna stop. It will continue to grow and prosper till the time we realize that there’s nothing more left to traffic and the environment is in serious danger. 

Counterfeiting – The term counterfeiting sounds very familiar because it indeed is. In our daily life, we come across several duplicate items knowingly/unknowingly. The items range from toys, footwear, pharmaceuticals, accessories, jewellery to electronics, big consumer products and even fake currency notes. Among the various illegal businesses, this one seems to be the least violent and heinous crime. But least violent doesn’t mean it is not worth as compared to other transnational crimes. Several reports infact consider counterfeiting as the most profitable illegal business and often the cost of establishment, maintenance and risk is very low compared to other illicit businesses. The reason behind the counterfeit industry’s success is the demand for quality products at cheaper rates. Of course, counterfeit products doesn’t bear quality but it is so in the case of price. According to the Global Brand Counterfeiting Report 2018, the amount of total counterfeiting has reached the US $ 1.2 Trillion and it will reach up to US $ 1.8 Trillion by the end of the year 2020. It doesn’t end here. The report also estimated the loss that original brands and companies bear due to counterfeit products amounting to the US $ 300 Billion in year. This industry is flourishing in a rapid manner because as already mentioned in the paragraph that demand for premium goods at cheaper rates will never extinguish. It will grow forever and ever. The only thing we can do as a responsible citizen of this country is that to stop falling for attractive schemes and trappings chalked out by fake product manufacturers. Only then we will be able to control the ever-growing greedy fake product market. 

Sources


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