Dark Commerce: How a New Illicit Economy Is Threatening Our Future

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EVENT TRANSCRIPT: Dark Commerce: How a New Illicit Economy Is Threatening Our Future

DATE: 6:00 pm, December 12, 2018

VENUE: Millbank Tower, 21-24 Millbank, Westminster, SW1P 4RS United Kingdom

SPEAKER: Dr. Louise I. Shelley

EVENT CHAIR: Ellie Green

 

ELLIE GREEN

Good evening everybody and thank you for joining the Henry Jackson Society and Dr. Louise Shelley to discuss “Dark Commerce: How a New Illicit Economy Is Threatening Our Future.” Dr. Shelley is the Omer L. and Nancy Hirst endowed chair and a university professor at George Mason University. She works in the Schar School of Policy and Government, and directs the Terrorism, Transnational Crime and Corruption Center, that she also founded. She is a leading expert on the relationship among terrorism, organised crime and corruption as well as human trafficking and transnational crime with a particular specialty in the former Soviet Union. She also specializes in illicit financial flows and money laundering.

Dr. Shelley received her undergraduate degree from Cornell University in Penology and Russian Literature. She also holds an M.A. in Criminology from the University of Pennsylvania and a PhD in Sociology, also from the University of Pennsylvania. Her previous books include Dirty Entanglements, Corruption, Crime, and Terrorism, and Human Trafficking: A Global Perspective. She has also authored Policing Soviet Society, Lawyers in Soviet Work Life, and Crime and Modernization. Recently Dr. Shelley has provided expert testimony for the Commission on Security and Cooperation in Europe on “The Opioid Crisis and the Dark Web: How Transnational Criminals Devastate U.S. Communities.” And, she has also testified before the Terrorism and Illicit Finance subcommittee of the House Financial Services Committee on the hearing “Exploring the Financial Nexus of Terrorism, Drug Trafficking and Organized Crime.”

Today Dr. Shelley will be discussing her most recent publication, Dark Commerce. This work goes far beyond the scope of simply looking at the ways illegal trade has transformed due to the advances in technology and the arrival of new forms of online currencies. She highlights a significant difference between illegal and illicit trade, and why illicit trade itself is becoming so difficult to control. Her book touches on environmental crime, sex trafficking, arms trade and the market for narcotics. The book not only analyses the elements of dark commerce, but also looks at possible solutions and asks whether the global community can come together to address the threat of illicit trade. I would now like to welcome Dr. Shelley.

  1. LOUISE I. SHELLEY

Thank you. It’s a great pleasure to be here, and I am surprised there are as many of you here at this moment of crisis in the government. So, yesterday I took a little time off and I was at the Tate Modern. And I stood on a balcony and I looked out at a bunch of pieces of glacier and- why do I mention this? Because those images of the glaciers that people are supposed to touch and understand and are supposed to help them conceptualise the problem of global warming and climate change and how these pieces of glacier that broke up are part of what is threatening our future. But, there isn’t such a clear single image that I can think of to give to you for dark commerce. If I were giving you images, I could give you a picture of a slain rhino, of an illicit fishing boat with traffic workers on it, deforestation that’s being done by a kleptocrat in Malaysia. But all these are part of pieces of the problem and there’s an odd one simple way of conceptualizing and communicating to you. And that’s what I think is the problem of this dark commerce, is that it is a difficult concept to get peoples’ heads around, for people to understand how many of these phenomena are related, how they have changed over time, in the last 30 years, how we’ve had a dramatic transformation of illicit trade, and also how it is targeting the resources that we need to survive on this planet. So, it is related to the issue of climate change because if you chop down many trees illicitly, you are harming the environment because the trees help absorb carbon. If you’re fishing too many fish, you’re hurting the conditions in the sea and what we need to be surviving. But, it is not the same as the problem of climate change. Illicit trade and dark commerce are exacerbating the problems of climate change, and climate change is exacerbating many of the problems of dark commerce.

One of the key examples that I give is of the Syrian conflict, and how it started. And not many people know about the history of what preceded this conflict in Syria. But in the 2000s, 2005-2008, there was an enormous and very serious drought in Syria. There was also a corrupt government, and there was a prohibition against giving drilling rights for water. But because there was corruption, there was an illicit trade in repowering rights. And that may seem like a very obscure theme to you, but its consequences are not. And so the water table was depleted, to such a serious extent that millions of people, literally fled the rural countryside and moved to urban areas. Because of the problems of urban areas, without social services for the population, there is an enormous correlation between where the millions of migrants who flocked into the cities were and where the start of the Arab Spring began.

So, when we think about water, we need to be thinking about conflict, and that water and the drought is a consequence of climate change, as is many of the conditions in the Sahel today that are helping contribute to the mass movement of migrants towards Europe which we all know and understand as having an enormous impact on Europe and also on Britain’s relationship to the EU. So let us think about, what are we talking about when we’re talking about illicit trade? Most people, when they think about this problem, what comes to their minds are drugs, humans, maybe arms, but the way that I’m looking at this in my book is something that is much, much broader. It includes the natural resources that we need to sustain life on this planet, such as water, wildlife, fish, trees, but also the most large scale of illicit trade, which is counterfeits.

These counterfeits are something much more pernicious that buying Gucci bags. They can be counterfeit pharmaceuticals that can kill you, counterfeit pesticides that represent a third of the market for pesticides in India, which leads to destroying the land and farmers’ livelihoods. In the most recent forms of illicit trade, we’re looking at properties that are not even tangible. For example, in the dark web, which I talk about a bit more for those of you who are not so computer savvy, you are finding sales of not only peoples’ identities, but also malware, botnet, Trojans. These are not even tangible objects, but just consist of algorithms. So, what are we looking at?

We’re looking at a profound transformation of illicit trade. The book starts back 4000 years ago, when you think back to the first legal code, the Code of Hammurabi. Then, in Hammurabi’s Code, there were prohibitions against being a (inaudible), that is, someone who sells stolen property. And what is the essence of being (inaudible)? Somebody has to know who’s in the business of being (inaudible), they have to be dealing in some tangible goods, and the (inaudible) has to pay you for the stolen property that you’ve brought them. And so that kind of relationship of interpersonal relationships, tangible goods, and either payment in currency or in gold or silver, is the basis of illicit trade until about 30 years ago.

Then 30 years ago, with the new technology, we’ve had a profound transformation in this phenomenon. In its first form of transformation, illicit trade and illicit products when online. They’ve gone into the dark web, and now you’re dealing with cryptocurrencies and these non-tangible products. So this is the profound transformation that we’re looking at, and all of this is happening very rapidly because it’s so easy to order things online. In fact, one of the things that I talk about is how the illicit markets function differently in the web and the dark web. In the dark web, where there’s no google search engines, you have to know where to go to find the illicit products that you want. The first big illicit website that I write about in the dark web was called the Silk Road.

To give you the idea of the volume of this, within 2 years of its establishment products valued at close to two billion dollars went through this website, and the person who was running it was not your typical criminal. He was a physics dropout of the PhD program at Penn State, and had been an Eagle Scout, which is the highest level of a virtuous boy scout, in his youth. So this is the kind of new criminals that we have functioning in the cyber world, not your gangsters on the street. Often much more intellectually savvy and making much more money than has ever been made in illicit trade in the past with great rapidity. This technology has been transformative, and as I was listening to the British news describe that there was a 2-3% decline in people going to the stores this Christmas time because they’re purchasing more online, this is a problem that is occurring with even greater effect in the dark web and in the web, where people are buying illicit commodities on a large scale.

Now, many of these commodities are not as hidden as we think about in the dark web. For example, about 60,000 Americans died from consuming and purchasing fentanyl. Much of this fentanyl, which is produced in China, is not hidden in the dark web. The website of the Silk Road, which was selling drugs, was in the dark web because it was run by an American who sort of thought of themselves as a drug entrepreneur who was rivalling Amazon. He was functioning in the dark web because American law enforcement was looking for him, because he knew he could not be functioning in the open web. But, much of the fentanyl that is being sold in the United States is being sold on open web sites from China. Because the drugs are not being sold internally in China, and therefore the Chinese authorities are not going after these websites. As I ask, is this the revenge of the opium trade, in which the British along with the Americans and the French in the Second Opium War, used opium against China? Are they now using fentanyl against the U.S.? All of this has to be understood in a historical perspective.

What else do we understand needs to be understood in a historical perspective? In a lot of the history of illicit trade, we’ve had pirates, for example, who served the state. If you think about the historic Silk Road, there were attackers of the silk and other commodities along the Silk Road. And they were not just ordinary attackers, sometimes they were state sponsored. If you want to think about Sir Francis Drake, the pirate, Sir Francis Drake made money for himself, but he also made money for the Crown. And if I talk to my French colleagues about Sir Francis Drake, or Spanish, they’ll call him El Draque, a pejorative term about him. Today we have cyber pirates who are doing this in cyber space. One of the cases I talk about in the book is a case about Pharma leaks.

Pharma leaks was a website that was started by a group of Russian criminals to sell Viagra and other drugs through their website to Western markets, primarily the United States but other European countries, Australia, and elsewhere. It’s interesting to study this market, it wasn’t quite as profitable as you might expect, because they had to pay so many expenses of corruption to do this. They had a large and successful business, and they were serial criminal entrepreneurs. Before they had gone into selling, online, Viagra, they had been in child pornography, they were chased out of the child pornography business. As researchers began to study what they did they went into spam and fake anti-virals. Unfortunately for one of them, he managed to get on the wrong side of an oligarch. He was not arrested in Russia for running these illicit businesses until he engaged in some financial activity that was harmful to somebody politically powerful. At that point he was arrested.

We have a lot of what I would call Russian criminal entrepreneurship in cyberspace. Part of this is the result of something that the Henry Jackson Society has focused on a lot, which is the problem of corporate raiding. That is, that there are no secure property rights in Russia or in former Soviet states, and so people cannot start legitimate tech businesses. Without legitimate employment, if they don’t immigrate somewhere to where they’re hired in Silicon Valley or in London, they go to the dark side. One of these entrepreneurs of Pharma leaks was arrested, and then he was offered what I would call the “get out of jail free card,” like in the Monopoly game. And what did he end up doing after he accepted the get out of jail free card? He is now the head of the national payment system of Russia. So if you want to understand how you pay for fake news, how you pay for all kinds of hacking, you need somebody in the payment system and he’s running the payment system. And if you want to run fake news, what do you need to do? You need to use botnets. That’s how you run an anti- campaign online. This man combined both attributes. This is the contemporary pirate or criminal who is serving both his own financial interests and the state. And that’s what we’re looking at again today in the contemporary world.

What are the consequences of this? One of the issues that the Henry Jackson Society has been very strongly committed to is that you’ve always been concerned a lot on human rights and rule of law, and that’s one of the problems of this dual activity of these cyber pirates, is this payment system, this deployment of malicious botnets, which is what you needed to run and drive people to the Pharma leaks website. This is something that undermines rule of law, undermines democracy, and it also undermines human rights in other ways. People ask me “how large is this phenomenon?” and it’s hard to know how large illicit trade is because it is not a visible phenomenon, it is so latent.

Through analyses in the cyber world, one can get a window into the scale of it, like the first Silk Road of which I talked about did almost $2,000,000 in two years and its successors, did multiple of that. Every successful website in the dark web is functioning on an even larger scale, the ransomware that is sold on the dark web that can lock up your computer and deny you access to your data, whether you are an individual or hospital or financial services company results in even greater payments to these criminals. One of the things, to go back to the human rights side of it, is that DARPA, the U.S. agency that helped develop the internet, I sort of joke that it’s like they created the Frankenstein and had to go address it. So, they spent much money in the past 2-3 years trying to understand how the problem of human trafficking had been accelerated through online activity and this gives you some idea of the size of the phenomenon because in their ads that they monitor, they sound out that in two years of analysis, 250,000,000 dollars’ worth of ads were put on to advertise the services of sex trafficking victims. If you think that these ads cost $5-10 apiece, they’re relatively small, you’ll get an idea of the scale of the phenomenon and how individual rights are being violated.

What do we need to do to address this problem? The first thing I think is really important is that we need to be thinking about how all of these problems are connected. It’s not as if one problem, like child pornography and selling counterfeit or unregulated pharmaceuticals are different phenomena, as I mentioned the criminals behind this Pharma leaks were serial criminals in doing many different types of illicit activity. The people who are engaged in overfishing off the coast of West Africa that leads to the domino effect of migration are engaged in also human trafficking because if their ship is caught they can abandon their seamen. Therefore, we need to think about this problem much more holistically, and unfortunately a lot of the people who are working on these issues look at them as one issue.

We have organizations working against human trafficking, organization against drugs, against wildlife—both government organizations and civil society. But nobody is thinking about this issue in a holistic way, which I think is absolutely key. In the past, when we attempted to counter illicit activity, it was the state that took the lead role, state-controlled territory, and people look to the state to resolve their problems, where the state took penal actions to resolve individuals who were depriving the state of revenue. But now, the locus of much of illicit trade is in the cyber world or deliveries are being organized through social media. For example, Facebook, as I talk about, was selling 70 types of Libyan weapons through its social media platform. The corporate world is assuming a much more important role in illicit trade than in the past, and they must be engaged on these issues and they must become much more accountable and there must be much more work between the public and the private sector. But there must also be civil society pressuring the corporate world to be much more responsible citizens.

The answer to this problem, and there’s not one answer, is that we need flexible responses that are not based only on law enforcement and military solutions. Sometimes there need to be much more agile solutions. (Inaudible) in the audience and I were with an Indian colleague in (inaudible) where we discussed many of these issues. And as I mention there is a serious problem of abuse and use of illegal pesticides in India, the issue is not just one of seizing all these pesticides, but of setting up worker cooperatives in communities, as our Indian colleague explained, where people band together to do larger scale purchases by someone who is more informed and can be doing intelligent purchasing. This is what is sometimes needed, a community response, a resilient community, rather than just a penal action where the penalties are often meaningless or where corruption undoes the response, and we need to think much more flexible and creatively about how to address these problems. The key to countering fishing boats from Asia fishing in others’ waters is not necessarily attacking the fishing boat, but developing rational policies of cultivating fish that make protein source readily available to the new middle classes of Asia that want to be eating well.

This is the kind of flexible thinking that we need about these problems, and not just coming at it with a punitive response that often doesn’t have much success in dealing with the problem. It may deal with the single perpetrator, but it doesn’t deal with the problem and the systemic problems that it represents. And there’s much more that needs to be done of thinking about rational policies and harmonization of law when possible that makes it possible to take away from some of the opportunistic elements that create, for example, the illicit flow in cigarettes where taxes in one place are 1/3 what they are and so people buy in one place and smuggle to another.

This issue requires multiple responses, and it needs a much more serious response today because if we don’t we’re not going to have the fish in our seas to support the world’s ever growing populations or the trees that we need to absorb the carbon and deal with our problems of climate change. With that, I’ll finish and welcome your questions. Thank you.

ELLIE GREEN

I would like to start off with a question of my own, I just wanted to know your thoughts—you touched briefly on the pharmaceutical company and the access to drugs on the dark web. How much would you say that the opioid crisis in America has, you know, how much blame would you put on the dark web for the opioid crisis in America?

  1. LOUISE I. SHELLEY

The dark web is responsible for part of it, but there is so much that is available on the open web that it’s not just the dark web that’s responsible. It’s a piece of the problem, but there’s so much that you can order directly from China, which will guarantee delivery if you look at some of these websites, 48 hours and no customs problems and replacement if you don’t get your product, that it’s not just a problem of the dark and hidden web that requires some sophistication to enter into.

ELLIE GREEN

Okay, thank you. Any questions?

MAN

Hi, thank you—thank you very much. I just got a question, what is there to really regulate on the dark web its almost impossible (inaudible). I mean, are there any suggestions of what governments around the world can do within their limitations

  1. LOUISE I. SHELLEY

Yes, so—tackling things on the dark web is not as different as you may think from tackling things in the open web. What it takes to do this is finding the website and then identifying the people behind them and then trying to remove them. So, the case against Silk Road took quite a while and a lot of investment of law enforcement activity, but there’s a lot of effort going on in both—in the U.S.—in both the governmental sector and the private sector to be developing tools to be basically scrape the dark web, find these locations and then trying to understand who are interacting in this space. And people who are often working in this are not always as clever as they can be, which is fortunate.

They may be using the same names that they use in the open web as they are when carrying out their activities in the dark web. There are ways in which you can begin to develop and associate patterns because people usually function in both the open web and the dark web simultaneously. So, there’s a lot that can be done for developing tools to locate this. And it’s also important for the same kinds of algorithm functions being done and A.I. to work in the dark web also should be much more applied in the open web, because there’s not enough being done especially in the corporate world to go after the kind of data analytics that they need to be doing to find the solicit activity.

ELLIE GREEN

Any other questions?

  1. LOUISE I. SHELLEY

I hope I haven’t left you speechless! Yes?

MAN

Can you perhaps tell us a little bit more about the dark web, how it differs from the open web, I don’t really understand much about it or, I’ve heard of it—

WOMAN

It just seems like it’s very impenetrable, you know, you’ve got all these government agencies that almost seem powerless to do anything.

  1. LOUISE I. SHELLEY

Alright. So let me explain to you a little bit more about the dark web. So, the surface web, which is where you probably spend a large amount of your time, is just a small percentage of the sort of, the working of the computer system. Most of it exists in what is called the deep web and the dark web. So the difference between the deep web and the dark is that—well, both of them are not searchable by search engines—but the deep web is different in that it’s not intentionally hidden. So, for example, we had a very successful business in the United States called Craig’s List. And when Craig’s List, which advertised sexual services, was shut down it was assumed by Backpage.

Now, those listings, which are primarily advertising women in different communities, are not searchable through Google. So that means it’s part of the deep web, because there’s not a search engine that helps you find it. But if you went into whatever community you’re in and you typed in Craig’s List you could find an apartment, you could’ve found before Airbnb a place to rent, and then if you went into the sexual services side of it you could find women that were being sold. So, that part was the deep web.

The dark web is something that you enter through special instruments like TOR, and TOR was originally developed by the U.S. military and it has positive uses in that if you are a journalist and you are trying to communicate anonymously with other individuals, you could go in through TOR and establish relationships and remain undetected. And that was sort of the original intention of this, instrument of how to access basically the bowels of the computer systems that were not readily accessible. But in the last 15 years, this dark net has become the home of large amounts of this illicit activity.

The first part of it, where it went, what illicit activity, was child pornography, which once it exited the open web went increasingly into the dark web. And then came this, enormous drug market that operates. In the dark web, you can buy drugs, you can buy arms, you can buy people literally, and one of the fastest growing parts of it is now these illicit computer tools that are malware, botnet, ransomware, so if one day your computer doesn’t work anymore and you wonder what has happened and you’ve clicked on some link and your computer has been taken over by ransomware because it’s entered into your system. This is what you buy on the dark web. And they also sell your identities, your passport, financial systems, and it’s extremely sinister. There’s—

WOMAN

Do you think that there’s not enough money being devoted to try and tackle that sort of thing? Or countries, you know, saying we haven’t got enough money to devote to that…

  1. LOUISE I. SHELLEY

I mean there’s a problem in that there’s a differential access and availability to do this. So for example, in the U.S. there’s a lot of research being done on this both in the governmental sector and in the private sector. But a lot of this activity is going on in—by criminals operating out of Eastern Europe, out of the former Soviet Union, where there’s no legitimate employment for these tech geniuses. And so they’ve gone into this world where they can make significant amounts of money rapidly. And it’s in those—

WOMAN

Where is the policing, then, in the world wide web, not www because it’s all underground but there’ enough, sort of, agencies fighting crime that there must be, in the cyber world someone to attack that and deal with it on a worldwide basis.

  1. LOUISE I. SHELLEY

Unfortunately—

WOMAN

(Inaudible)

  1. LOUISE I. SHELLEY

No, I’m saying, absolutely not. You may go online on Amazon—

WOMAN

There used to be things like (inaudible) INTERPOL, I don’t know if anyone’s heard of INTERPOL. I mean surely there must be some sort of facility, I mean on the world wide web there’s obviously going to be crime, crime is everywhere. So what you’re saying is that there’s no facility on a world wide basis—

  1. LOUISE I. SHELLEY

Well, I mean INTERPOL has opened up a cybercrime centre in Singapore, but INTERPOL is not an international police body. It is basically what I would call a post office in which you exchange information, so there’s nobody who has responsibility. Some of the cases I’ve talked about in the book about this transformation of illicit trade online, you’ve had victims of ransomware in a hundred and ninety countries. But, you may only have forty of them with law enforcement working together. And in one of these, people think that when they go into this world of the dark web, what, to buy their drugs, that it’s hygienic in some ways. That there’s no filing, that there’s no corruption, that it’s sort of the Brave New World. And what’s very interesting, that I’ve given examples of, is that this isn’t quite true.

For example, in the Silk Road, this boy scout, this eagle scout, was caught, he was sent to prison for multiple lifetimes. As he had gone into the drug markets and people didn’t pay him, he began to order hits online in the dark web, and was paying for them in bitcoin to eliminate people. And just because he didn’t see whether they died, you know, that doesn’t, as the judge said, relieve him of responsibility so he began as a techy who didn’t have a lot of empathy, it’s not like he could have gone out as a hitman for the Mafia and shoot somebody, but he could order this through bitcoin. And, there were two, it was interesting, I was at a conference for the dark web as I was finishing the book, and one of the law enforcement people who was talking about his involvement in the Silk Road case, mentioned his colleagues who are now sitting in prison, this is a law enforcement person, because the corruption had gone into the cyber world.

One of his colleagues was stealing bitcoin from the criminal, and the other one was selling him information on the law enforcement investigation. So, they eventually were caught because their colleagues noticed some rather strange behaviour and began to put them under surveillance, the same way it operates. And in another case, when you talk about how this works, is that there was this major case about, I mean Silk Road was just a few billion dollars, that went on to a case of Avalanche, which is involved 4-5 billion dollars, and when the Ukrainian law enforcement went to seize the criminal, you know, he fired guns at them, and eventually they took him into custody and then he was released within 24 hours, probably buying off the administration, and disappeared and has never been heard from since. I was recently asking members of the anti-corruption commission who are supposed to be investigating large scale corruption, and they weren’t even aware of this case, of how this case—

WOMAN

(Inaudible)

  1. LOUISE I. SHELLEY

No, no. They’re so far removed from the cyber world that they could not even imagine that this was going on in their country.

ELLIE GREEN

Is there anyone else who has any other questions? Yes, please.

WOMAN

Thank you, so— How and to what extent does illicit trade on the dark web (inaudible) terrorist groups and tax committees? Terrorism…

  1. LOUISE I. SHELLEY

It helps to a certain extent, but a lot of illicit trade is going on in the open web, that it doesn’t need to go into the dark web. For example, one of the projects that our centre, that it’s been working on, has been doing, is looking at trading antiquities. And the trade in antiquities that—this project was funded by the U.S. State Department—is going on mostly on the web, you don’t need to go into the dark web. Because if you’re stealing large amounts of coins, you’re selling them in what has been transformed as instead of selling a few large items illicitly, what they’re going is taking these large numbers of coins, sometimes combining them with coins that have been in circulation for a while, and selling them on the web.

WOMAN

I’m sorry, but why is that exactly illegal?

  1. LOUISE I. SHELLEY

It’s illegal because they’ve stolen all these coins out of Iraq and Syria, they’ve smuggled them and they’re selling them on eBay now, for example. Sorry, I should have been clear on that. So, how do we know that this may be connected to terrorism? It’s that we’ve gone into some of the Facebook profiles of the people who are involved in the selling. And when you look at who’s involved in it, you see very clear associations with people who, or symbols of terrorist organisations and things they’re admiring or looking at. So not only do we know that this has, some of this antiquities looting, has been done, I mean, today I was at the British Museum where there’s a wonderful exhibition on Mesopotamian archaeology, and a lot has been made of what Daesh have destroyed. But there was also a lot taken and smuggled and that’s helped generate revenue. Not a huge amount of revenue, but something. And because of the territorial control, they are also permits that were being given by Daesh to deal in illegal antiquities excavations, which were then being sold abroad.

So this is not something where you’re trying to reach a significant market by going into the dark web. That restricts the number of clients and customers that you can reach, and so this is a business decision that I talk and write about in the book, of when you use the web and when you use the dark web. For example, the case of Libyan weapons sales that are benefitting terrorists, this is going on through Facebook. It’s not something that you need to hide because Facebook, as we know, has done nothing about elections and false news and they’re also doing almost nothing to be stopping illicit trade.

The same thing is going on with some of the cigarette sales that are going on and helping small scale terrorist financing. The reports of the deliveries of these are going on through Facebook, not through the dark web. Maybe there’s some more large scale financial transactions that are going on there, but a lot of what you need to be running illicit financial activity for terrorists, especially in Europe, is not large amounts of money. That you can do very successfully because so much of social media and the open web is just not doing the kind of vetting of what they’re selling.

WOMAN

Is this because of the failure of law enforcement agencies?

  1. LOUISE I. SHELLEY

It starts before the failure of law enforcement agencies. In— Europe has taken a different policy, but in the U.S., under our commercial code, which I write about in this book and request that this be changed, platforms, unlike any other kind of utility, water utilities we regulate, we have consumer protection. There is—online platforms are exempt from any regulation of what they’re selling. Because they say they are online platforms and—

WOMAN

But isn’t it too hard to do?

  1. LOUISE I. SHELLEY

And so they have had an exemption of any responsibility of what they’re selling. And the only area in which this has been changed is in regards to human trafficking, where the Senate passed legislation 97-2 to make online platforms responsible for not facilitating human trafficking. And, if you can read the coverage of this you will find that Google lobbied against this legislation.

Why did they lobby against this? Because they said that this was sort of the slippery slope to the regulation of everything else and since people don’t like human trafficking they’d vote for this and it was beginning of regulating online commerce. So it’s not really a problem of law enforcement, law enforcement is a piece of the problem, but it’s a problem of this absolute pass that’s been given to the tech world as they’ve been able to increase profits at enormous rates. It doesn’t need to go into the dark side because so much of sales on Amazon and eBay and other platforms are facilitating the sale of illicit commodities.

ELLIE GREEN

Are there any further questions? Yes?

WOMAN

I think you said you were going to distinguish between illicit and illegal?

  1. LOUISE I. SHELLEY

Alright. So one of the problems that we have in this area is that what is illegal is very clear, we know that human trafficking is very clear, drugs, arms trade. What is illicit is often more nebulous. For example, if you have a coin that has been dug up before 1970 when UNESCO controls went in, that’s not illicit. If you have Daesh that’s dug up coins, that’s illegal. But if you blend the two, you don’t necessarily know what is illicit and what is illegal and this confounds the problem.

WOMAN

Ah, thank you.

  1. LOUISE I. SHELLEY

Just the way you don’t know whether a fish has been caught in protected waters or not. And that’s part of what creates these problems is that there’s not such clear definition or clear pedigree of what these products are. In fact, the Victorian (inaudible) had an example of how there’s money laundering of illicitly harvested trees and how they are turned into plywood and therefore the provenance of this is hidden.

ELLIE GREEN

Well I think that’s probably all we’ll have time for today, and thank you so much for answering all of those questions. And if anyone would like to purchase the book, you will be able to do so outside and I believe we accept card payments as well so thank you very much.

  1. LOUISE I. SHELLEY

Thank you!

HJS



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