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March 5, 2015, Filed Under: Demand Reduction, Economic

Loopholes in China’s Domestic Ivory Market

At the end of February of this year, China announced a one-year moratorium on ivory imports, stating that it will not be issuing import permits during this time. This move did little to appease the international conservation movement, which is more concerned with China’s domestic ivory market and circumvention of laws already in place. China has a consistent record of ivory and illegal wildlife seizures and TRAFFIC rated the country second for their law enforcement index among demand country clusters, second only to Australia, Germany and the U.S. So how is it that in spite of effective law enforcement and reasonable (though limited) success with public awareness campaigns, demand for products like ivory and tiger bone are rising at unprecedented levels? Two prevailing problems could help shed some light on this issue: (1) the unchecked growth of wildlife gray markets and (2) ineffective and often unenforced certification schemes meant to distinguish legitimate from illegal products.

Gray Markets in China. While Chinese authorities have had some success cracking down on the ivory black market—both its physical and online incarnations—the so-called ‘gray market’ has eluded control. The presence of legal markets for products such as antique ivory, tiger bone, and bear parts aid in the creation of gray markets, where illegal and legal products are sold together. Gray markets typically take the form of an live auction market through which uncertified, illegal products are laundered. A UN report claims that these markets are the product of ambiguous laws and legal domestic breeding programs. Grace Ge Gabriel in the UN Chronicle says, legal sales provide cover for traders of “wildlife products from all sources—legal and illegal—by mixing contraband with look-alike legal products.” In gray markets, even those consumers not willing to break the law may be complicit in the illegal exchange of poached animals. Legal permits for ivory carving have allowed traffickers protection in ivory smuggling.

A burgeoning art industry coupled with a lack of investment alternatives for many of the Chinese nouveau riche has caused demand for ivory to soar. It is increasingly valued both for cultural and aesthetic reasons, as well as its investment potential. As Chinese government steps up enforcement, the price of ivory rises along with it, making ivory trade all the more lucrative for illegal dealers and unscrupulous consumers looking for growth potential in their investments.

Ineffective Certification Schemes. China’s compliance with CITES and their continuation of legal ivory trade is contingent on an effective and properly functioning certification program that will allow consumers and authorities to identify the differences between legally registered ivory and the illicit variety. However, the system is plagued by loopholes and ignorance on laws and regulations on the part of those involved. Certificates for ivory are often reused for recent illegal pieces or forged. According to IFAW’s 2005 analysis, a number of problems make the system ineffective at controlling the illegal trade of poached ivory:

• Many traders are not even aware of the legal system, which was only recently introduced; it will take tremendous time and effort to inform them all.

• It is unclear and doubtful whether the ‘database’ contains enough information for the Government to trace finished products back to the raw ivory from which they originate.

• It is unclear how the legality of registered stocks is verified.

• Individual items cannot be linked with their accompanying certificates (other than through photos for more valuable items) since the items themselves are not physically marked.

• It is unclear whether it is compulsory to keep a record of all sales, and if so, how this record is checked and compared with the information on the database. It is extremely doubtful that such record-keeping and an adequate check by the Government are being carried out, or could be done so on a long-term basis.

• Currently the inspections carried out by the Government are far from frequent and vigorous enough to ensure the adequate implementation of the certificate system and it is uncertain how this shortfall will be overcome.

Gray markets and ineffective certification schemes have been two significant obstacles in controlling the illicit trade of ivory in China. What is needed is a more rigid registration program for ivory. Each piece must be certified and marked, and these certificates should not be easily counterfeited or transferred from one ivory piece to the next by uninformed or dishonest sellers. The long-term policy goal of cultivating a stronger culture of consumer responsibility is also necessary. If ivory buyers are more educated about the origins of certain products and the laws regulating them, consumption of illicit wildlife products will likely decline. Top-down product regulation and enforcement and grass-root public education campaigns may stand a real chance at reversing the disturbing trend of ivory demand in China.

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