China House Illicit Trade 25 July 2023

Unraveling China’s Impact: Exploring Taxation, Illicit Trade, and the Nicotine Market in theUnited States (Harms to U.S. National Security)

Prepared ICAIE Statement at Briefing for U.S. Congressional Staff
Bi-Partisan Tax and Trade Staff Association (Ways and Means Committee)
Select Committee on China
Appropriations Committee
Foreign Affairs Committee
Homeland Security Committee

David M. Luna
Executive Director, International Coalition Against Illicit Economies (ICAIE)
Rayburn House Office Building
Washington, DC
25 July 2023

Over the years, in both my US government and private sector capacities, I have grown concerned about the increasing corruptive influence, criminality, and undemocratic force for chaos, inhumane brutality, and global insecurity advanced by China’s Communist Party (CCP), the de facto ruling elite.

In particular, China’s predatory illicit activities around the world are troubling as they are penalizing entrepreneurship, exploiting theft of trade secrets and critical information, infringing on intellectual property rights, exerting malign influence, and laundering dirty monies derived from an array of corrupt foreign transactions, criminality, and hubs of illicit trade across the Americas, and globally.

Make no mistake, China exploits every illicit market to its advantage, acting as the largest player in almost every major sector of transnational crime.

As a result, we are talking about several trillions of dollars in illicit proceeds every year that are being generated from the predicate offenses for money laundering across black markets and the digital world that touch China’s jurisdiction and markets, and finance the CCP authoritarian regime, China’s national economy, and its military.

China’s current financial woes and spiraling downward economy will only further its illicit trade, nationalism, and further geopolitical uncertainty and military aggression.

It is widely-known that the trade in illicit goods deprives governments of much-needed tax revenue, and that taxation often incentivizes criminals to exploit greed crimes and further expand illicit economies globally.

Currently, as the Executive Director of the International Coalition Against Illicit Economies (ICAIE), a national security-centric NGO in Washington DC that helps bring partners across sectors to tackle illicit economies and related corruption and money laundering, we are working to ensure that the US Government brings greater accountability to the CCP government, and encourage China not to turn a blind eye to the multi-dimensional illicit threats that are seriously harming the United States.

Through evidence-based research, threat intelligence, and dialogue, we aim to ensure that there are stronger policy and law enforcement actions to combat many of the criminal activities and corresponding money laundering outlined in our recent ICAIE reports, testimonies, and statements.

A CCP Threat Multiplier Across Illicit Industries: Let me now share specific impacts of CCP criminality that I believe are harming US national security and impacting our communities, and numerous American brands across industries.

It is critically important to show how Chinese infiltration across corporate America, especially in those companies doing business in China, abusive and intrusive governance, IP theft, lawfare and third-party funded litigation that extort corporate resources and trade secrets from our most innovative companies, and illicit trade in fentanyl and fake goods are hurting U.S. competitiveness and our American industries, supply chains, economy and jobs, and greatly harming the health and safety of our citizens.