Arizona business leaders have been rallying against the dangers of illegal trade, creating partnerships with national institutions and between the private and public sector to respond to this crisis. Illegal trade presents a continuing threat to Arizona’s economic prosperity and public safety, and leaders with diverse backgrounds have come together to find common solutions.

The smuggling of illegal and counterfeit goods is nothing new for our state. Because of our 370-mile-long border with Mexico, Arizona often sees the worst of these criminal activities., federal authorities seized more than $13 million in smuggled currency, third most in the nation.

The profits criminal organizations accumulate from smuggling at the border are an escalation in criminal activity. Because of this recycling of illegal funds, Arizona has the 13th highest rate of human trafficking in the country, with nearly 1,400 cases since 2007.

The burdens wrought by illegal trade can be devastating to commerce and public safety. Cigarette smuggling alone leads to $125 million every year in lost tax revenue. In 2021, nearly $1.3 billion was lost in retail thefts.

It’s not just money. Illegal trade puts lives at risk. Massive fentanyl seizures are commonplace. In recent weeks, a cache of fentanyl precursor chemicals was seized from a Tucson warehouse. Because of the scale and complexity of illegal trade, business leaders must create partnerships that mobilize community resources.

The Arizona Â鶹´«Ã½Ó³»­ of Commerce & Industry has been proud to support United to Safeguard America from Illegal Trade (USA-IT), a private-public partnership that protects Americans from black market criminals. Last December, the Â鶹´«Ã½Ó³»­ was recognized with the 2022 Award for Most Committed USA-IT Partner for its dedicated work on the frontlines of the illegal trade issue.

These partnerships build upon the work of business leaders, law enforcement, and policy experts to understand the many facets of illegal trade and to develop strategies to combat them.

This work is exceedingly important as Arizona prepares to welcome hundreds of thousands of out-of-state visitors to our state for the Waste Management Phoenix Open and Super Bowl LVII. These mega-events are economic drivers and present an unparalleled opportunity to showcase Arizona. And while we like to focus on the enormous potential to attract prospective business, we also must recognize the potential to attract bad actors.

It is not uncommon to see an uptick in illicit trade,, human trafficking, and related illegal activity during the Super Bowl. Fortunately, Arizona is not new to hosting major sporting events, and we’re confident our law enforcement, tourism sector, and broader business community are better prepared than ever to mitigate and address these issues. With their commitment and collaboration – and the vigilance of all residents and visitors – we can ensure another safe and successful Super Bowl experience for all.

At the Legislative Forecast Luncheon hosted by the Arizona Â鶹´«Ã½Ó³»­ last month, Arizona’s new Attorney General Kris Mayes shared her commitment to address this issue. The partnerships which are being made with state and federal officials, USA-IT, and the business community will be essential in taking on this challenge and in defending the security and economy of our state.

Mike Bailey is general counsel and director of legal reform programs for the Arizona Â鶹´«Ã½Ó³»­ of Commerce & Industry

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Arizona business leaders are joining forces with their colleagues across the nation to raise awareness about the dangers of illegal trade and counterfeit goods. While illicit trade may not typically be the topic of headlines, illegal smuggling of counterfeit goods hurts local business owners, saddles law-abiding citizens with higher taxes, and presents national security and public safety concerns.

Annually, $464 billion of counterfeit and pirated goods are brought into the U.S., and we’ve seen an increase of 40% of online counterfeited goods since January of 2020. Cigarette smuggling alone leads to an annual billion-dollar loss in unpaid state and local taxes. It all adds up to of dollars in the pockets of transnational criminal organizations. Additional losses are taking place in the retail sector, as organized retail crime has due to looters this season. Just last week, Arizona Attorney General Mark Brnovich issued an explicit to criminals and cited the vigilant work of the Organized Retail Crime Task Force in his office.     

Why does this matter for Arizona? Trade crimes, like counterfeiting and retail crime, are not victimless; the same criminal organizations that smuggle illegal and counterfeit goods are also often responsible for trafficking drugs and people. These criminals sneak across our border with Mexico and bring a wide range of illegal contraband with them. These illegal products, whether it be counterfeit cigarettes and merchandise or more nefarious items such as weapons and drugs, are incredibly harmful to our communities. Recently, federal agents in Scottsdale—enough of the lethal opioid to kill countless Arizonans. 

While law enforcement is doing everything it can, the problem is too complex to handle alone. Only through strategic and dynamic partnerships can we protect consumers from dangerous products and help our small businesses and communities thrive. United to Safeguard America from Illegal Trade (USA-IT) is a public-and-private-sector partnership protecting Americans’ security and prosperity from black market criminals. USA-IT is working closely with Arizona coalition members to provide training for law enforcement officials and education materials for the general public.

Recently, I had the opportunity to join national members of the USA-IT coalition in Washington, D.C., for a summit that brought together business leaders, law enforcement, and policy experts to highlight the urgent need to tackle illegal trade—including counterfeiting, smuggling, organized retail theft, and drug and human trafficking. Arizona’s own Senator Kyrsten Sinema and Louisianna’s Senator Bill Cassidy spoke about the direct, urgent risks to local communities that accompany illegal trade.

Subject matter experts from large and small companies, law enforcement agents, and policy experts discussed how illegal trade funds terrorism, the new challenges confronting law enforcement, and the imperative role that public-private partnerships play in minimizing illegal trade.

Following the summit, USA-IT presented policy to members of Congress with the goal of fighting back against illegal trade and bolstering support for local law enforcement. The Arizona Â鶹´«Ã½Ó³»­ of Commerce & Industry is a proud partner of USA-IT and will do everything it can to join USA-IT in these efforts. To create obstacles for these criminals is to defend Arizona’s small businesses, protect our border, minimize American overdoses, and bolster the American economy. Let us stand together in partnership and make an impactful difference in the new year.

Michael Bailey is General Counsel of the Arizona Â鶹´«Ã½Ó³»­ of Commerce & Industry

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