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Can Organised Crime Infiltrate Your Supply Chain

Updated: Feb 7

If we can't do the basics of checking whether modern slavery is being used within our supply chains, how can an organisation recognise the risk that organised crime has on its supply chain, particularly when they are continually diversifying their criminal enterprise and sectors of operation.

Change brings opportunity

Understanding the diverse nature of organised crime and its criminal enterprise is no simple task, each country has different groups focused on one or many areas of illicit activity from modern slavery to people trafficking and the multitude of global routes that have a nexus with business and legitimate supply chains.

Many international companies have been hit by the scandal of supply chains employing children or slave labour, so if we can't get this process right how can criminal enterprise be identified.

Organised crime groups recognise that diversifying into legal business can give a further revenue stream, hide their illicit activities and launder the proceeds of crime. Some of the common sectors where organised crime can be identified include:

  • Construction and infrastructure

  • Waste disposal

  • Cash based business

  • Transportation

  • Hotels and real estate


A number of organised crime groups have diversified into counterfeit goods because they recognise that these activities are low risk. Counterfeit goods in many cases can produce similar profits as drug trafficking and also low risk of prosecution if caught.

As we watched the global response to the Coronavirus, all sectors were impacted in one way or another and many organisations quickly diversified or enhanced their eCommerce capabilities, leveraged digital giants and shortened supply chains to enhance business outputs.

Government and healthcare response to the crisis was challenging, with limited availability of medical supplies has meant an international scramble to obtain the finite amounts of Personal Protection Equipment and related medical products.

As countries focused their attention on gaining access to these resources, the urgent need for the manufacture and supply of materials from international markets and new vendors gave opportunity for criminal enterprise to maximise their profits, when normal procurement procedure and supply chain guardianship was ignored or omitted. Organised crime groups quickly diversified into online sales and eCommerce using digital giants to sell inferior or counterfeit products, gaining credibility from the site and minimising risk because of sites inability to detect criminal enterprises.

It is when procurement becomes an urgent requirement that organisations change their procurement approach and control measures are dropped to expedite delivery and distribution, normal tendering processes are changed to single source and direct award and an organisations ability to confirm receipt and distribution of materials is limited due to reduction in resources and the need for urgent delivery.

When we initially saw food shortages and empty shelves in supermarkets, we only need to look back a few years at the horse meat scandal and the infiltration of supply chains by organised criminals and the adulteration of meat products. Although not specifically highlighted in the current crisis it is easy to see how supply chains could easily be compromised.

Initial information from Action Fraud, confirmed 16,352 people fell victim to online shopping and auction fraud during lockdown, confirming that they received reports of online shopping fraud totalling £16.6 million.


Looking at historical disaster events, organisations such as The Carnegie Endowment for International Peace reported that during the Ebola crisis in West Africa, the Red Cross has since estimated that over $6 million of its assistance was lost to fake customs bills, overbilled supplies, and payments to non-existent workers. Other international aid and domestic budgets were likely subject to similar leakage. Will waste and abuse again threaten citizens’ lives in the global response to the coronavirus pandemic?

In addition to the medical support, in its response to business impact governments are providing financial support to business. When we consider natural disasters like Hurricane Katrina in the USA, it produced one of the most extraordinary displays of scams, schemes and stupefying bureaucratic bungles in modern history, costing taxpayers up to $2 billion.