KUALA LUMPUR: Malaysia ranks 72nd globally in resilience against illicit trade, while Asean as a whole trails major global economic groupings despite the region’s growing importance as a manufacturing and trading hub.
A new report by the Transnational Alliance to Combat Illicit Trade (Tracit) found that Asean scored 49.7 points on its Illicit Trade Index.
This is below the Asia Pacific average of 50.9 and far behind the Organisation for Economic Cooperation and Development’s (OECD) 64.4 points.
Singapore leads Asean at 29th out of 158 countries globally, followed by Indonesia at 39th and Thailand at 56th.
Malaysia ranks sixth among the 10 Asean economies, behind Vietnam at 61st and the Philippines at 69th.
None of the Asean countries made the global top 20, while Laos, Myanmar and Cambodia ranked 100th, 117th and 138th respectively.
The findings, released at the Regional Intellectual Property Summit on Enforcement, underscore the risks illicit trade poses to Asean’s ambitions under its Vision 2045.
This includes deeper economic integration, resilient supply chains and a trusted digital economy.
“Illicit trade undermines the economic and social benefits that Asean integration is intended to deliver,” said Tracit director-general Jeffrey Hardy.
“As Asean works toward Vision 2045, it’s imperative to implement stronger trade-integrity safeguards to control illicit trade.”
Tracit director of programmes and principal author of the report Suriya Padmanaabhan said Asean’s performance was particularly concerning given its growing role in global commerce.
“Asean’s resilience to illicit trade is only average,” she said.
“They all have different strengths and weaknesses, but average is not good enough for a region that has become so important to global trade.”
The report found that while Asean generally performs relatively well in trade, customs and border controls, nine of its 10 economies score poorly in regulating supply-chain intermediaries.
This means the region’s biggest vulnerability increasingly lies beyond traditional border checkpoints, with online marketplaces, postal networks, express couriers, maritime operators and free trade zones exposed to exploitation by criminal networks.
“Asean cannot secure international trade by focusing only on what happens at the border,” Hardy said.
The report also highlighted online commerce as a growing channel for counterfeit and illicit goods, calling for common regional standards requiring platforms to verify sellers, proactively block illegal listings and impose permanent bans on repeat offenders.
“Removing an illicit listing is far from creating a safe and secure marketplace for online shoppers,” Padmanaabhan said.
Malaysia is developing stronger platform-accountability rules, alongside initiatives in the Philippines and Vietnam that Tracit said could provide a foundation for wider regional action.
Tracit also urged tougher oversight of goods in transit and transshipment, interoperable customs intellectual property recordation systems, greater accountability in free trade zones and stronger anti-corruption measures.
“Asean has built an integrated trading economy, now it must build an equally integrated defence against illicit trade,” Hardy said.