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Category: Global Regulation

  • Hungary’s Fight Against Illicit Cigarettes

    Hungary’s Fight Against Illicit Cigarettes

    Hungary’s National Tax and Revenue Authority (NAV) said it recorded significant successes in the fight against the illegal tobacco market last year. Major General Tamas Demeter, vice president of the authority, said 118.5 million illicit cigarettes were confiscated, three times more than the previous year. They also seized 120 tons of stolen consumer tobacco. Thieves in the tobacco-growing regions of Hungary often steal tobacco leaves just before they are to be harvested by farmers.

    In addition to illegal production, Demeter said that cigarette smuggling is also flourishing. He said border agents are becoming increasingly vigilant and are finding smuggled tobacco products in specifically modified hidden cavities of vehicles, concealed under transported goods, and even in tins of Bulgarian goat cheese. He also said smugglers are going high-tech, using man-sized drones to fly hundreds of packs of cigarettes across the border at a time.

  • Five Suspects Indicted in California for Illegally Selling Tobacco

    Five Suspects Indicted in California for Illegally Selling Tobacco

    California Attorney General Rob Bonta today (April 10) announced the grand jury indictment of five suspects for selling tobacco without a license and committing tax fraud that cost the state more than $24 million in lost tax revenue. The suspects were indicted on 118 counts of conspiracy, selling tobacco as an unlicensed distributor, filing false tax returns, money laundering, and a white-collar enhancement. 

    “From the investigation to prosecution, my office is dedicated to seeing these five defendants pay for their crimes against the people of California,” Bonta said.“Schemes that defraud the government of millions in taxpayer money will not be tolerated. Today’s announcement should serve as a reminder: If you break the law and engage in fraud and theft, my office will hold you accountable.”

    From January 2017 to April 2024, the suspects allegedly engaged in the importation of untaxed tobacco products into California using shell entities, subsequently selling these products to customers in the state while evading the tobacco excise tax. This operation involved a series of coordinated actions aimed at misusing personal and regulatory information, hiding the source of funds used for purchasing untaxed tobacco, concealing the arrival of tobacco shipments in California, misleading customers about compliance, and avoiding obligations related to California’s tobacco excise tax. 

    Additionally, the five suspects perpetuated their scheme by submitting false monthly excise tax returns to the California Department of Tax and Fee Administration or, in some cases, neglecting to file these returns altogether.

  • FDA Whistleblower Dishes on Agency’s Shortfalls

    FDA Whistleblower Dishes on Agency’s Shortfalls

    David Oliveira, who recently left the FDA after six years as a senior staffer, is speaking out about problems at the agency under the Biden administration, including tobacco control, diversity, equity and inclusion, and failures to combat China flooding the U.S. market with illicit vapes after the FDA’s top tobacco official was removed from his position. 

    “Many of us had been anticipating it for quite some time. We knew that change was drastically needed at FDA when it came to Tobacco Control,” Oliveira said in an interview with Fox News Digital. “Because Tobacco Control had really gotten out of control, there were many, many failures in core missions for the center that needed dramatic change and new leadership.

    “Many of us, whether it be from public health, consumers, small business owners, industry, and including even Senator Dick Durbin, who last year at a hearing said to Brian King, ‘It looks to me that you have fallen down on the job.’ So really, it runs the spectrum of people who are unhappy with what’s gone on recently with FDA in terms of tobacco regulation.

    “I frequently would attend shows and visit vape shops, and I was somewhat a canary in a coalmine, and would report back as to what I was seeing, and I would warn them that what I was seeing on the ground was out of control. We had a lot of people in the building who would go online and try to do some surveillance, but when you get out into the real world and you see the number of vape shops that are flooded with these illicit products, and I started to warn them about the amount of nicotine that was in these devices. We went from a Juul device, which had around 200 puffs, which was the equivalent of one pack of cigarettes, then I started seeing 5,000 puffs. I brought that warning back to the center, and then the following year would see 10,000 puffs. Now on the market, you can see 40,000 and 50,000 puffs. This is what the Chinese have done. They have not sought to get products authorized. They will introduce the latest and greatest technology. I saw a Santa one that was red and white. They’ll introduce flavors like Gummy Bear, Blow Pop, and Fruit Rollups, and these things that are absolutely youth-appealing because they do not care.” 

    View the 15-minute interview here.

  • Opinion: Washington Flavor Laws ‘Kicking the Can Down the Road’

    Opinion: Washington Flavor Laws ‘Kicking the Can Down the Road’

    This week, after previous renditions seemed dead in the water, Washington legislators slipped twin bills into the House and Senate that would impose a statewide flavor ban on tobacco products and add a carbon tax on cigarettes. In an opinion piece for the Tax Foundation, Adam Hoffer and Jacob Macumber-Rosin, both experts in tax policy, compared these schemes to others around the country.

    “A carbon tax on cigarettes is novel, while the idea for a flavor ban is not,” they wrote. “Massachusetts and California have already banned flavored tobacco products in their states, and the experiences have been so negative that the Biden administration backed off its own plan for a nationwide flavor ban.

    “Both Massachusetts and California experienced massive tax revenue declines, incredible growth in illicit market activity, and little to no change in smoking rates. Following its flavor ban in 2020, Massachusetts saw cigarette excise tax revenue decline by more than $100 million and revenue has persisted at the lower level. Unfortunately, fewer legal sales don’t necessarily translate to less consumption. Our previous work identified that about 90% of the reduction in sales in Massachusetts was offset by increases in legal sales in neighboring states. Illicit product seizures and smuggling estimates have skyrocketed.”

    The writers said California fared no better, losing more than $230 million in state cigarette sales and excise taxes since it banned flavors in December 2022. Unlike Massachusetts, however, smokers didn’t turn to neighboring states, they began utilizing illicit and international markets to replace their legal purchases.

    “One study collected details on 15,000 discarded cigarette packs from public trash containers across 10 major California cities in May and June of 2023,” they wrote. “These data showed that 21.1% of the discarded packs were menthol-style cigarettes, a mere 3% drop in menthol market share estimates from before the flavor ban.

    “The same data found foreign and illicit market share spiked. Non-US packs comprised 27.6% of the sample, compared to an estimated foreign market share of only 17% previously.”

    The state’s fiscal analysis predicts a flavor ban would decrease revenues by more than $100 million per year, and the proposed carbon tax would only recoup 1% of that.

    “The justification for applying a carbon tax on top of existing cigarette taxes is weak,” they wrote. “Secondhand smoke certainly harms others nearby who are forced to inhale it, and cigarette smoking releases carbon dioxide, but classifying cigarettes as a broad state-wide pollutant is a stretch.

    “These haphazard policies appear to be part of a ‘try-anything’ effort to close the state’s projected $15 billion budget shortfall. Washington State taxpayers deserve sound fiscal policy reforms that will provide stable, long-run revenue for the government. Narrow-based and patchwork fixes only kick the can down the road to the next set of elected officials.”

  • Essex Vape Shop Closed for 3 Months for Selling Illicit Vapes

    Essex Vape Shop Closed for 3 Months for Selling Illicit Vapes

    The Mellow Yellow Vape Shack in south Essex, England, was ordered to close for three months after being caught selling counterfeit tobacco and illegal vapes by Thurrock Council’s trading standards team in February. The team, accompanied by sniffer dog Lily, found large quantities of counterfeit cigarettes and hand-rolling tobacco hidden in the shop, along with illegal vapes that came in packaging targeting children or that were more than 10 times the legal tank size.

    This is the second time the shop has been caught selling illegal products in less than six months. The Basildon Magistrates Court ordered the shop to remain closed for three months and for Amir Ahmadi to pay £4,665.67 in costs.

    “Let this be a message to any business that thinks it can cheat and endanger its customers by selling counterfeit and illegal goods,” said Victoria Holloway, councilor responsible for place and the environment. “Our trading standards team will find you and the full force of the law will be used to hold you to account.”

  • Washington Lawmakers Take Another Shot at Banning Flavors

    Washington Lawmakers Take Another Shot at Banning Flavors

    Efforts to ban flavored tobacco products in the state of Washington were revived Monday (April 7), as a bill to do so got a House committee hearing after the effort was previously assumed dead. Lawmakers rolled out twin bills aimed at nearly every product that contains tobacco or nicotine.

    House Bill 2068 and its Senate counterpart, SB 5803, call for a statewide ban on the sale of all flavored tobacco and nicotine products (e-cigarettes, chewing tobacco, hookah, cigars, menthols, nicotine pouches, and menthol cigarettes). They also call for an extra $2 in tax on every pack of cigarettes. If passed, Washington would leap into the top tier of states with the highest cigarette taxes, going from $3.025 per pack to $5.025. The tax would be tied to inflation and adjusted every three years to keep pace with rising costs. Other tobacco and vapor products, including alternative nicotine options like nicotine pouches, would also see steep tax hikes, up to 95% of the product’s taxable sales price.

    “These products don’t contribute to the social well-being of our communities,” said Rep. Kristine Reeves, the bill’s main sponsor. “They definitely don’t contribute to the health and well-being of our children. And I would love for you to join me in helping find a path forward to make sure that the next generation is not getting hooked on tobacco.”

    Reeves pushed similar restrictions in another bill this session which failed to move forward.

  • Tobacco Bootleggers, Police Becoming More Creative

    Tobacco Bootleggers, Police Becoming More Creative

    Tobacco bootleggers are becoming more inventive in their methods of storing and transporting goods, and thus, police and enforcement officials are adapting in the ways they catch them. The seizure of illegal tobacco products in Hull, England, doubled last year, according to the city council, with more than 2.4 million counterfeit cigarettes confiscated, along with 45,731 illegal vapes, and 25,841 tobacco pouches.

    Detection dogs have uncovered illicit tobacco in numerous sophisticated hiding places, including a compartment inside a concrete drain, a delivery chute from an upstairs flat, a false mirror, and a floor safe with a hidden hydraulic lift, the council said.

    Rachel Stephenson, head of public protection at the council, said seizures ranged from small traders to “major distributors in the city.” One raid found thousands of counterfeit products hidden inside an industrial bin.

    “Our team and our partners demonstrate over and over again that they stay a step ahead of those trading illegal tobacco and vapes,” Stephenson said.

  • Bidi Opens Latest Appeal Against FDA

    Bidi Opens Latest Appeal Against FDA

    Yesterday (April 2), Bidi Vapor LLC urged the Eleventh Circuit to reverse a U.S. Food and Drug Administration decision denying its application to market a disposable e-cigarette, saying the agency acted unlawfully. In oral arguments in Miami, attorney Eric Gotting told an appellate panel that the FDA’s decision was “arbitrary and capricious and unlawful,” and that the agency admitted adult smokers would likely switch to Bidi’s safer product—a disposable e-cigarette prefilled with tobacco-flavored e-liquid—but still denied the application.

    In January 2024, the FDA issued a marketing denial order (MDO) for the tobacco-flavored Bidi Stick-Classic disposable vape. The decision came while the agency was continuing a court-ordered second review of marketing applications for flavored Bidi Vapor products. The FDA said Bidi’s premarket tobacco application “did not demonstrate an overall net benefit to people who use tobacco products and lacked sufficient evidence to address health risks.”

    Bidi believes the FDA violated the Administrative Procedure Act and hopes to build on its record of successfully contesting adverse FDA decisions. In August 2022, the 11th Circuit set aside the original MDOs issued for its 10 non-tobacco-flavored products. That ruling put the 10 PMTAs back into scientific review and allowed those flavors to remain available for sale pursuant to the FDA’s compliance policy for deemed tobacco products.

  • Maldives Proposing Generational Ban on Tobacco

    Maldives Proposing Generational Ban on Tobacco

    During a podcast hosted by his office, Maldives President Dr. Mohamed Muizzu said that he is considering three proposals for a “generation ban” on tobacco, aiming to prevent younger generations from smoking. The proposals differed only in date, when people would be forever banned from smoking if born after January 1 in either 2000, 2004, or 2007.

    Explaining the rationale behind these options, President Muizzu stated that focusing on the 18 to 25 age group and below would make it easier to prevent addiction before it becomes deep-seated. He also highlighted the importance of consulting medical professionals and other stakeholders in formulating the policy and said that Health Minister Abdulla Nazim Ibrahim has been tasked with drafting a Cabinet paper on the proposed ban.

  • Belgium Tobacco Display Ban Goes into Effect

    Belgium Tobacco Display Ban Goes into Effect

    Belgium’s new laws to limit the visibility of cigarettes and other nicotine products, with the hope of curbing impulse purchases, went into effect yesterday (April 1). Cigarettes and other tobacco products can no longer be displayed in shops and stores larger than 400 square meters are banned from selling such products altogether. This is the second phase of a program that included the ban of disposable e-cigarettes beginning Jan. 1.

    “Our ambition is to have a smoke-free generation by 2040,” said Belgian Health Minister Frank Vandenbroucke. “From now on, it is illegal to have cigarettes or vapes on display, that is visible, in a store. It is not a prohibition on buying this stuff. You can buy it, but you have to ask the vendor.”

    No specific guidance or material on how to handle tobacco products was provided to retailers. Each shop has had to find its own solution to the display ban, from handmade plastic curtains to sophisticated shelves that automatically light up when opened.

    “It is annoying because the government hasn’t given us any supply,” said news and tobacco shop owner Jenny Van Vaerenbergh. “They should have provided the necessary equipment.”