Experts: Arizona a hot spot for illegal trade

The Arizona Chamber Foundation’s Arizona Junior Fellows program hosted a panel at Arizona State University on the rise of illegal trade and strategies to combat it at Arizona State University last week.

Moderated by Eileen Klein, the former Arizona state treasurer and an adviser to the Arizona Junior Fellows, the panel featured  Maricopa County Attorney Rachel Mitchell, the director of external affairs at Philip Morris International Kristin Reif, and President and CEO of the Arizona Trucking Association Tony Bradley. The event was cosponsored by United to Safeguard America from Illegal Trade (USA-IT). 

Founded in 2021, USA-IT is a coalition of brand enforcement experts, business organizations, and law enforcement agencies with the mission of stopping illegal trade in Arizona and the 14 other states it currently operates in. 

According to USA-IT spokesperson and former Immigration and Customs Enforcement Director Matt Albence, “Drug cartels and terror networks continue to adopt new forms of illegal trade to profit and expand their operations. Unfortunately, Arizona’s vast terrain and border with Mexico makes the state an attractive target for these criminals.” 

Both the Arizona Chamber of Commerce & Industry and the Arizona Trucking Association have joined USA-IT.

Illegal trade deeply affects both the public and the private sector of the economy through lost profits and lost tax revenues. In a 2019 study, the Mackinac Center for Public Policy found that “37.4% of all cigarettes consumed in Arizona are illegally smuggled into the state, which translated to a $174.8 million loss of tax revenue.” 

Kristin Reif explained the profitability of illicit trade of cigarettes, saying, “On an 18-wheeler semi[-truck], it costs about $100,000 for all the product that’s in there. Think about the return on investment on that. It only costs $100,000 and you can make $4 million. If they have 40 containers, they can lose 39 of them and still make a profit.”

Stopping illegal trade is just one part of a larger effort to end the border crisis affecting Arizona and other states on the southwest border. 

Retail crimes and illicit trade are committed by the same criminal organizations that are responsible for the trafficking of humans and drugs along Arizona’s 370-mile border, says Mike Bailey, the general counsel of the Chamber.

Mitchell said part of the reason why retail crime and illicit trade is on the rise is because the pandemic-induced supply chain disruptions made even mundane items scarce, giving criminals the incentive to steal items and sell them for a huge profit online. In response, stores like CVS and Rite Aid have started to place more items behind locked panels or install alarms on items. According to CVS spokesman Michael DeAngelis, CVS has “experienced a 300% increase in retail theft from our stores since the pandemic began.” 
You can find more information on the Arizona Junior Fellows and the Future of Arizona Democracy project here.