The wealthy city-state of Singapore — with its flourishing trade, orderly life and almost non-existent crime — is hardly a place one would associate with illegal trade. But a new report by a reputed organization reveals that in fact the country has a poor record of preventing just that. The Economist Intelligence Unit released a 100-point index Wednesday that placed Singapore at seven out of 17 Asian countries for its ability to prevent illicit trade that includes counterfeit goods, arms and endangered wildlife.
Singapore’s low ranking was largely the result of its lacunae in its free trade zones. Commissioned by the European Chamber of Commerce, the index evaluated countries against 14 indicators including transparency, intellectual property and customs.
Singapore scored 69.8 points to tie with Taiwan. Still, it is behind neighbor Malaysia (71.8), often seen as a nation with a far less efficient government. The top performers were Australia (85.2), New Zealand (81.8) and Hong Kong (81.4). “While it has the strongest customs environment, a failure to monitor its busy free trade zones dragged Singapore’s score down,” the EIU said in a press release.
One of the index’s indicators rated countries between zero to four for free trade zone governance, including checks on warehouses for smuggled goods. Singapore was handed a score of one, meaning that there was little to no monitoring. It also received a poor rating for government cooperation with stakeholders. In an emailed statement late Wednesday, Singapore Customs said the island nation was “not a major origin or destination” for intellectual property rights infringements and counterfeit goods.
“Singapore’s domestic laws apply within the free trade zones and normal trade and customs requirements are in place for goods imported into or exported from Singapore,” it said. Given that Singapore ports have a high volume of trade and tight turnaround times, it would be more effective to adopt an intelligence-led approach based on information received from overseas counterparts to enforce against such suspected shipments, it said.
Simon Jim, the chairman of the European Chamber of Commerce’s Committee on Intellectual Property Rights, told reporters at a news conference where the report was released, that fake goods don’t just take revenue away from companies or governments. “They threaten the security of nations by supporting transnational crime syndicates and terrorist groups,” he said.
Southeast Asian counterparts, except Brunei that did not feature in the index, ranked low on the table. The bottom three were Cambodia (23.9), Laos (12.9) and Myanmar (10.8). China, which carries a reputation of being a hub for counterfeit goods, had a score of 61.6. Illicit trade is more than just counterfeit goods. Illicit trade includes guns, endangered species, endangered wildlife and trafficked humans, said author Chris Clague from the EIU.
A lot of these other forms of illicit trade follow the same channels that counterfeit goods do, he said. EIU said that rising labor costs in China could encourage manufacturers to look for cheaper sites, causing illicit trade to flow to developing Southeast Asian countries.