The Office of the United States Trade Representative calls American small business “The Economic Engine Driving the World Economy”. Yet, when negotiating recently with Russia over the terms of Russia’s accession to the World Trade Organization, the USTR seems to have focused only on those American businesses with massive lobbying power (e.g., the software, movie, music and pharmaceutical industries). In a document outlining the details of the agreement, the USTR specifically names a single website in Russia (allofmp3.com) that the music industry would like to have targeted for shutdown.

But, in this effort, the USTR ignores a fundamental component of the economic relationship between the U.S. and Russia in the Internet age – the rampant fraud, spam and virus epidemic that is slowly draining resources and money from U.S. citizens and companies alike. Unlike the potentially inflated profit loss estimates from the music and software industries which are based more on wishful thinking than fact, it is possible place a real dollar amount on the amount of money being siphoned from the U.S. economy by phishing and credit card fraud. Although many former Soviet bloc countries are involved and no country is blameless when it comes to internet fraud, Russia harbors more than its fair share of cyber-criminals.

Another huge drain on the Internet economy is spam and the proliferation of viruses and trojans. Our research data reveals that many of the major virus and spam schemes flooding inboxes around the world are originating from Russia. Yet, even when presented with evidence of such activity, and in some cases, identity and location of the perp, Russia takes no action to prosecute or incarcerate these criminals. Many question how motivated Russia really is to throttle a significant source of economic enrichment – regardless of the means. The fact is, although an occasional effort is made to arrest fraudsters, Russia remains a safe haven for spammers and virus writers.

The negotiations for Russia’s accession to the WTO are not yet complete, so it is possible these issues may be addressed. The USTR in the past have addressed such issues with other countries. However, without an anti-spam or anti-malware lobbying body to bend the ear of the USTR, it is easy for such concerns to be overlooked. Small and large businesses alike need to look at funding efforts to bring spam, phishing and virus issues to law and policy makers and help them understand that these issues are vital to the economic success of U.S. citizens and businesses on the Internet today.

This entry was posted on Monday, December 11th, 2006 at 10:27 am.

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