This report investigates the extent to which criminal and terrorist groups are engaging in counterfeiting, using film piracy as an example. It lays out a number of cases detailing the connections between organized criminal syndicates and counterfeiting and presents three case studies demonstrating the fact that some terrorist groups also engage in counterfeiting. It then explores the implications of that involvement and offers suggestions for ways in which both law enforcement and policy officials could address them.

This chapter defines the scope of the issues and outlines the research methods used here. The next chapter defines organized crime, terrorism, and...

This chapter addresses organized crime and terrorism, how they can be defined, and how they are organized, and it outlines the global reach of the ills both cause. It outlines the similarities and the differences in the motivations of the two groups, and it looks at the variety of ways they find common cause despite the differences. A central common motivation is money: Organized crime seeks it, and terrorism needs it. This chapter explores the possibility that counterfeiting could become increasingly important to terrorists as terrorist groups become more cell-based, with more-obscure links to al Qaeda and other central organizations,...

Why might organized crime or terrorist groups be attracted to counterfeiting? The easy answer is profit, and lots of it at minimum risk compared with many more-capital-intensive and higher-risk illicit activities that they already engage in, such as drug and human trafficking. Consider this: A blank optical disc costs as little as 20 cents in the United States (and is free if it is stolen), while counterfeits can sell for many times that amount, from 35 baht (about $1 at 2008 exchange rates) from vendors in Bangkok, to $5 in the streets of New York’s Chinatown, or as much as...

The following cases, many of which are very well documented in court papers, offer a rare glimpse inside the operations of organized-crime groups profiting from film piracy. For ease of reading, this chapter and Chapters Five and Six present summaries of the case studies and citations to only some of the available documentation. Each of the case studies is described in greater detail and with fuller documentation in the Appendixes. Examining the array of case studies in full drives home the point that the three main features of piracy—low barrier to entry, high profit, and low risk—have made...

In three of our case studies, the trail of film piracy leads to terrorism, as terrorist groups either engaged in piracy to fund their terror or received support from sympathizers who engaged in crime. The criminal groups in the case studies and their criminal activities are summarized in Table 5.1. The cases suggest that the connection between piracy and terrorism may be stronger than previously believed. Further study is warranted to confirm the extent and strength of that connection.

Earlier RAND research on the growing convergence of crime and terrorism networks identified counterfeiting as one of several activities groups used...

The degree of interaction between governments and organized criminal syndicates and possibly terrorist groups is often unclear, as is the degree of tolerance shown by the former toward the activities of the latter. This chapter explores some of these connections. In the Russian case, as organized crime sought to move toward legitimate business, it built on preexisting connections to officials at all levels—cultivating senior officials, bribing others, and intimidating still others—though the criminal activities and violence continued. In the Mexican case, the stakes of politicians led them to tolerate, or even create, “protected spaces” for criminal activity. In...

Since the face of film piracy is uglier than is often recognized, how should national policy and law enforcement respond? What more could be done? And, given scarce resources, what more should be done to dry up this source of funding for organized-crime syndicates and terrorist organizations?

DVD film piracy is a lucrative part of the portfolios of organized crime and can fund violent crime, including terrorism. As a crime, film piracy devalues respect for law and order, and its distribution points can become havens or protected spaces for still other crimes. Buying a pirated film often abets criminal organizations,...

The obstacles to combating intellectual-property piracy are formidable. Against them, what can be done? And what should be done? This chapter begins with efforts to reduce demand for pirated goods and with international law and IPR regimes. The latter offer a way of bringing developing countries such as China into the fold as they, too, begin to have intellectual property to protect. But both decreasing supply and reducing demand of pirated goods take time. The gap between signing treaties and implementing them on the ground will remain frustratingly large. Accordingly, this chapter offers a number of recommendations aimed at getting...