Trade Fraud and Non-Tariff Measures

46 Pages Posted: 27 Jan 2022

See all articles by Hiau Looi Kee

Hiau Looi Kee

World Bank - Development Research Group (DECRG)

Alessandro Nicita

United Nations - Conference on Trade and Development (UNCTAD)


Similar to tariffs, non-tariff measures (NTMs) may induce trade fraud when they are restrictive. This paper examines whether discrepancies observed in the official trade statistics of importing and exporting countries are partly due to trade fraud associated with evading border NTMs. To capture the restrictiveness of NTMs, this paper estimates the ad valorem equivalent (AVE) with importer-exporter-product variations. This paper presents a theoretical model and empirical evidence showing that discrepancies increase with AVEs, consistent with the trade fraud due to traders intentionally mis-declaring countries of origin and product classifications in order to evade border NTMs. The results are driven by homogeneous products and the trade between
developed and developing countries.

Keywords: trade discrepancies, non-tariff measures, ad valorem equivalent of NTMs, tariff evasion, trade fraud

Suggested Citation

Kee, Hiau Looi and Nicita, Alessandro, Trade Fraud and Non-Tariff Measures. Available at SSRN: or

Hiau Looi Kee (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
Washington, DC 20433
United States
202-473-4155 (Phone)
202-522-1159 (Fax)


Alessandro Nicita

United Nations - Conference on Trade and Development (UNCTAD) ( email )

Palais des Nations
Office E 8074
Geneva, 1211

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics