Category: Illicit Trade

  • Unfit for the Counter

    Unfit for the Counter

    Unwrapping the issue of counterfeit and noncompliant vapes

    By Lee Bryan

    Photo: uliab

    It feels as though you can’t check the news these days without reading about rogue traders dishing out vapes to kids or stumbling across the latest report about Trading Standards—the U.K. authority charged with enforcing consumer protection legislation—seizing a few thousand counterfeit devices.

    National newspaper headlines about youth vaping and environmental damage have changed public perceptions on the reduced-risk product, and evidence shows that many people wrongly believe vapes are equally or more harmful than cigarettes, leading some smokers to decide against making the switch. 

    The U.K. government has historically been pro-vaping, taking an evidence-based approach and encouraging smokers to switch as part of its smoke-free 2030 ambitions. However, a minority within the industry who flout the law and put their profits above all else are putting all of this at risk for the sake of their own greed.

    The vape sector is primarily a community of well-intentioned retailers, manufacturers, distributors and activists whose main priority is to help adult smokers move away from combustible tobacco, and as the head of a leading vape compliance firm, I’ve seen this firsthand.

    The unscrupulous sellers, who provide so much ammunition to the mainstream media, are as much at odds with the rest of the harm reduction community as they are with regulators and health officials. They must be stopped before they take vaping from being one of the most popular and effective stop smoking tools available in the U.K. to public enemy No. 1.

    Where Are Brands Falling Short?

    As a leading authority on vape regulations, we at Arcus Compliance understand how complex the road to a compliant status can actually be and recognize the challenges of meeting legal obligations.

    Even those with the best intentions can fall foul of regulations if they don’t have the right knowledge, and our job is to help them navigate this often difficult terrain.

    In fact, we conducted an industry-wide analysis that uncovered the most common ways that vaping products fall short of regulatory requirements. These included:

    • inadequate checks to ensure e-liquid recipes do not contain inappropriate substances in specific markets;
    • copying competitors’ labeling;
    • notifying the wrong product type to the regulator;
    • reusing former identifier codes for new products; and
    • lacking systems for tracking adverse safety events.

    In many cases, these can be put down as simple mistakes, but errors like these can make the regulatory process more expensive and complicated for brands.

    They can also bring a product’s journey to approval to a grinding halt and land it in hot water with the Medicines and Healthcare products Regulatory Agency (MHRA), the body responsible for overseeing the U.K. market.

    It’s critical that brands avoid these common pitfalls and ensure their vape products are up to standard across the board, especially when tensions over industry compliance are so high.

    Wholesalers and retailers must also step up and play a role here by demanding only the highest levels of compliance from products and brands, not only to protect their own reputations but also the reputation of the entire sector.

    Recognizing the need for further regulatory support in the industry, Arcus Compliance recently teamed up with distributor Phoenix 2 Retail to deliver a “Pre 2 Post-Market Compliance Testing Program.”

    This collaborative effort aims to support and maintain industry standards while also encouraging the evolution of policies that raise the bar when it comes to responsibility. 

    Sadly, there’s no denying that a small pool of traders are knowingly going against the law to line their own pockets—typically by selling to minors or pedaling youth-appealing products.

    They cast a dark cloud over our industry and deserve to feel the full force of the law, which is why I welcome the recent comments of Neil O’Brien, the parliamentary under-secretary of state at the Department of Health and Social Care, to clamp down on regulatory noncompliance, set up a Trading Standards “flying squad” to enforce the rules and tackle illicit vapes and underage sales and to set up a national test purchasing scheme—something for which the U.K. Vaping Industry Association has long been advocating.

    Policies like these represent a significant forward step in combatting the noncompliant sector, and I’m confident that they can be the foundation on which we can level up accountability and responsibility in the U.K. vaping arena.

    By coming down hard on those who flout the law, policymakers can protect young people, prevent underage sales and allow the compliant vape industry to thrive.

    Where Does Policy Need to Go From Here?

    While the government’s renewed determination to stop rogue traders and prevent youth access is wholly welcome, we can’t allow ourselves or our politicians to make the mistake of thinking the problem is now solved—the reality is that we are a long way from the finish line.

    If nothing else, lawmakers should take onboard other recommendations put forward by the UKVIA, including increased fines of up to £10,000 ($12,409) per instance for those caught selling to minors and a retail registration scheme.

    It’s also high time we reviewed the arbitrary limit on e-liquid volume for vapes. If we were to increase this from the current legal maximum of 2 mL to a more substantial 10 mL, we could make e-cigarettes far too expensive for young people to buy while ensuring vapes remain competitively priced against cigarettes.

    More urgently, regulators need to tighten their grip around product and packaging by introducing more checks during the market approval process.

    It still amazes me that brands don’t have to upload any pictures to the MHRA when they apply for permission to sell in the U.K., and making this one, relatively small, adjustment could make a big difference to the compliance issue by preventing products with child-appealing imagery—i.e., cartoon characters and copycat candy designs—from ever making it onto the shelves.

    Preemptive strategies like this will help wash away vapes that are blatantly trying to catch the attention of kids, reaffirm the industry as adult-focused and could prove to be an invaluable tool in the fight to eliminate youth use and underage access.

    The government must now build on the new momentum brought forth by its newly announced measures by engaging in conversation with industry experts and implementing balanced policies that target the illegal market while supporting vaping as a public health tool.

    Regulators, retailers, health officials and advocates together are perfectly positioned to pioneer a new age of vape compliance—I only hope we can seize this critical opportunity.

  • Singapore Officials Seize Vaping Products

    Singapore Officials Seize Vaping Products

    Image: Zerophoto | Adobe Stock

    Authorities in Singapore seized more than 85,000 vaping products in a warehouse raid conducted by Singapore’s Health Sciences Authority (HSA), reports Channel News Asia.

    This is the largest seizure of e-cigarettes and other vaping products by HSA, surpassing a haul in 2021 where more than SGD2.2 million ($3 million) worth of products were confiscated, said HSA and the Singapore police in a joint press release. The latest seizure has an estimated value of more than $5 million.

    The raid was the result of HSA following up on leads from investigating a group of people suspected of selling illegal vaping products.

    On March 28, six individuals were detained by the police at a multi-story car park at Block 592 Montreal Link. “The driver of a van was allegedly found to be distributing parcels containing e-vaporizers to five persons purportedly assisting in the delivery to buyers,” said the authorities.

    Under the Tobacco (Control of Advertisements and Sale) Act, it is an offense to import, sell or distribute vape products.

    Those found guilty for the first time can be fined up to SGD10,000, jailed for up to six months or both.

    Subsequent offenses double the penalties to a fine of up to SGD20,000, a jail term of up to a year or both.

    Vaping is illegal in Singapore. The purchase, use and possession of all vaping products are also prohibited.

  • Fines and Jail for Undeclared Manufacture

    Fines and Jail for Undeclared Manufacture

    Image: MasterSergeant | Adobe Stock

    A Belgian court handed out fines and prison sentences to several companies and individuals for undeclared cigarette manufacturing, reports The Brussels Times.

    The illegal cigarettes were manufactured and stored in a warehouse in Gosselies that was placed under surveillance in 2022. Another warehouse was discovered in a furniture factory in Anderlecht.

    A truck carrying 16 pallets of undeclared cigarettes manufactured in Belgium was checked near Jabbeke.

    The company running the Gosselies manufacturing was fined €36,710,000 ($39,580,338), and its head was also fined that amount as well as receiving a one-year prison sentence.

    Another company was fined €36,710,000 along with a suspended prison sentence for the amount exceeding €36,600,000. All manufacturing and transport equipment was confiscated.

    The other accused were fined €36,710,000 and received suspended prison sentences of six months, nine months and two years for the amount exceeding €36,600,000.

  • Call for Action Against Noncompliant Vapes

    Call for Action Against Noncompliant Vapes

    Photo: zef art

    The Chartered Trading Standards Institute (CTSI) has called for stronger actions against noncompliant vape products in the U.K., reports Convenience Store.

    Stating that the rise in noncompliant products is “getting out of hand,” the CTSI has asked for “clearer direction from government” and greater resources to fight the noncompliant trade.

    The CTSI has also suggested that manufacturers publish batch numbers of noncompliant products and introduce restrictions to stop youth vaping, including prohibiting cartoon characters or light-up vapes, restrictions on packaging colors and the promotion of vapes on social media platforms such as TikTok. The group also suggested looking at where the products are positioned in stores and increasing the sanctions available for those producers, suppliers retailers who don’t comply with the law.

    Vaping industry representatives applauded the CTSI’s position. “We share the CTSI’s concern over the growth in illicit and underage vape product sales and fully support their call for more resources,” the U.K. Vaping Industry Association said in a statement.

    “We also agree wholeheartedly that restrictions need to be explored to address youth vaping without impacting on adult smokers who wish to switch to vaping in order to quit their habits.

    “That’s why we are leading the way in forming a Youth Access Prevention Taskforce to develop detailed proposals to deal with the situation, and these include on-the-spot fines of up to £10,000 ($12,176.32) per instance for retailers who are found to be selling to minors and for selling illicit products; a national registration scheme for all retailers, meaning only those outlets that meet qualifying criteria can legally sell vapes; and a national test purchasing scheme that will ensure constant monitoring of retailers’ selling vapes to ensure that they are not turning a blind eye to purchases involving minors.

    “Critical to the success of our proposals will be a ramping up of enforcement, and this requires major funding in resources on the ground.

    “By Trading Standards’ own admission, resources are sadly lacking, and the government needs to step in and look at this situation as a matter of urgency. Our proposals are designed to support this funding need as monies will be raised from the fines and registration scheme.

    “We will be presenting our proposals to government and parliamentarians at the end of March.”

  • ‘Tax Hike Will Kill Jobs and Boost Smuggling’

    ‘Tax Hike Will Kill Jobs and Boost Smuggling’

    Photo: Tobacco Reporter archive

    New York’s cigarette smuggling problem will get even worse if the state implements an additional levy of $1, as Governor Kathy Hochul envisions, according to a Wall Street Journal article. 

    The WSJ reports that more cigarettes are smoked in New York than are legally bought, suggesting considerable levels of tax evasion and avoidance. New York imposes a statewide pack tax of $4.35 per pack. New York City imposes an additional $1.50 per-pack excise tax.

    Union workers have expressed discontent with the planned ban and tax hike. “Our union brothers and sisters in the tobacco industry are at risk of losing their jobs, benefits and pensions due to Governor Hochul’s proposed ban on menthol/flavored tobacco and tax hike,” Mike Smith, president of Local 810 International Brotherhood of Teamsters, said. According to Smith, 500 out of 4,000 drivers, warehouse workers and salespeople represented by Local 810 would lose their jobs if the ban is approved.

    “While we understand the intent of the legislation is not to eliminate Teamster jobs or destabilize Teamster pension funds, the unfortunate reality is that those will be certain results,” Thomas Gesualdi, president of the Teamsters’ Joint Council No. 16 representing 25 locals and 120,000 members, said in a letter to Hochul early in February.

    “I understand the impetus of the policy is to get people to stop smoking, which is a good thing,” Assembly Majority Leader Crystal Peoples-Stokes said. “But I think it shouldn’t be this selective. It goes way too deep … and would be a mistake, so I will be working to have it excluded.”

  • Factory Searched for Untaxed Products

    Factory Searched for Untaxed Products

    Image: Comugnero Silvana | Adobe Stock

    Ukrainian detectives from the Economic Security Bureau of Ukraine and the Territorial Department of the Security Intelligence Service are searching a tobacco factory in the Lviv region upon suspicion of untaxed tobacco products.

    Company officials are suspected of manufacturing and storing tobacco products without excise tax stamps; accounting and tax records do not show the economic transactions, and income received was not declared.

  • A Never-Ending Fight

    A Never-Ending Fight

    Photo: Yuri Arcurs/peopleimages.com

    The illicit cigarette trade continues to plague the tobacco industry in the Balkans.

    By Vladislav Vorotnikov

    Over the past decades, the illegal cigarette business has been flourishing in Serbia, Montenegro and Bosnia and Herzegovina, causing pain not only to the Balkans but also to the European Union. In recent years, the battle against nonregistered tobacco plantations and underground cigarette factories has seemingly intensified, but complete victory remains beyond the horizon.

    Serbia is the largest tobacco market in the Western Balkans. In 2022, legal sales stood close to $2.2 billion compared to roughly $900 million in Bosnia and Herzegovina and $95 million in Montenegro. It is estimated that smokers account for 40 percent of the population in Montenegro and 30 percent in Serbia as well as in Bosnia and Herzegovina.

    The size of the illegal tobacco market in the Western Balkans is one of the hallmarks of the region. Its share varies significantly across the region. Illegal products account for 6.5 percent of tobacco consumption in Serbia, 20.3 percent in Bosnia and Herzegovina and 27.9 percent in Montenegro, a survey conducted by international nongovernmental organization the Global Initiative Against Transnational Organized Crime (GIATC) showed. Some other analysts put the size of the illegal sales in Serbia at 15 percent.

    The picture is believed to be similar in Albania and Northern Macedonia, where no comprehensive studies aiming to calculate the share of illegal tobacco products in retail sales have been made in the past several years.

    Satellites Against Criminals

    Serbia is a pioneer in using satellite technologies in fighting against illegal tobacco plantations.

    In 2022, law enforcement agencies seized 142 tons of illegal tobacco leaf and tobacco products in Serbia, the tobacco administration of the Serbian finance ministry said in its annual report. This is lower than in the previous years, which indicates that the battle against tobacco plantations has finally started paying off.

    The positive developments are attributed mainly to new technologies that the state phytosanitary inspection employs with help from tobacco factories, said Goran Pekez, director of corporate affairs of Japan Tobacco International’s (JTI) Serbian office.

    To battle against illegal plantations, the Serbian authorities took measures unprecedented for this part of the world. The government has launched a group of satellites to survey the terrain with the aim of identifying all plots where tobacco leaf is illegally grown, Pekez said. Serbia is a pioneer in using satellite technologies in fighting against illegal tobacco plantations.

    Using space technologies is expensive, but the efforts already bear fruits. “The success of the satellite system can be seen in the results of the control measures, which are showing improvements every year. In the last five years, illegal tobacco plantations in Serbia have been almost eradicated,” Pekez said, estimating that during this period, roughly 800 tons of illegal tobacco were seized, preventing damage to the Serbian budget of around $453 million.

    When discovered, all illegal plantations are destroyed in order to prevent illicit tobacco from ending up in the supply chain. Still, some officials, acknowledging the positive impact of the satellite imaging, argue that it is unlikely to completely take down the illegal tobacco business in the Balkan region. One of the problems is that satellites primarily search for large tobacco farms, frequently overlooking smaller plantations.

    In 2022, Serbian tobacco producers donated four drones and accompanying equipment worth $1.2 million to the phytosanitary inspections to improve control of illegal tobacco plantations in the country, Pekez said.

    The legal tobacco industry continues to invest in Serbia. In December 2022, JTI inaugurated a new production line at its Senta facility. (Photo: Goverment of Serbia)

    Deep Routes, Strong Ties

    Currently, the illegal tobacco trade negatively impacts the economies of each Balkan country, but it has not always been that way. In the 1990s, cigarette smuggling became a means of survival for Montenegro, which extremely needed money to fund armed forces during the Balkan War. The turmoil of those bloody years laid the ground for what some analysts describe as the largest illegal tobacco industry in Europe.

    “Many of the high business and political elite today are still connected to cigarette smuggling,” the GIATC survey discovered, adding that a share of illegal cigarettes is destined for local markets, but large quantities are also smuggled to the European Union and some other countries.

    For example, in 2021, law enforcement agencies discovered a channel through which at least 840 million counterfeit cigarettes, known in the Balkans under the common name cheap-white, had been smuggled from Montenegro on fishing boats and small cargo ships to the Mediterranean. The Montenegrin port of Bar is currently known as the key European hub for cigarette smuggling.

    “The region’s proximity to lucrative markets in Western Europe, its links to North Africa and Turkiye and increased traffic from Latin America and Asia, combined with vulnerabilities linked to corruption, create ideal conditions for criminal networks to engage in such trafficking. The problem seems to be growing,” the GIATC said in another report focused on the Balkan region.

    “Seizures are abundant, but regionally integrated port-oriented security responses remain scarce despite multiple police operations,” it added.

    In addition, the illegal tobacco business in the Western Balkans keeps evolving. While the authorities have seemingly succeeded in fighting against nonregistered tobacco plantations, there are reports about the growing smuggling of raw tobacco, primarily from China. Tobacco smuggling in the Balkans is controlled by organized criminal groups also involved in drug traffic.

    Many of the business and political elite today are still connected to cigarette smuggling.

    Mold, Waste and Animal Excrement

    In the fight against illegal cigarettes, consumers also play an important role. In Serbia, a large share of customers buys counterfeit cigarettes from resellers, Pekez said, attributing this to a considerable price difference with legally manufactured tobacco products.

    Consumers remain loyal to illegal cigarettes even though the possible danger to their health from counterfeit products manufactured in underground factories and workshops, which has been widely covered in recent years by local media.

    “We emphasize that these products, which are not subjected to [sanitary] control and do not meet the standards common for tobacco products, can be dangerous to health—they can often contain numerous harmful ingredients—mold, waste and even animal excrement,” Pekez said.

    The widening gap between counterfeit and legal cigarettes largely determines consumer preferences. A rise in excise rate has doubled the size of the illegal cigarettes market in Bosnia and Herzegovina during the past five years, the GIATC quoted from a source in the local government. Currently, prices also rise in Serbia, which is targeting to put its legislation in line with European regulations.

    From Jan. 1, the price of all types of cigarettes in Serbia will increase by roughly $0.09 per pack due to a rise in excise rate to 33 percent. Under the excise duty schedule adopted in 2020, it will continue to increase gradually until 2025.

    Tobacco Giants Scale Up in Serbia

    Despite the wide presence of counterfeit products on the market, Serbia is the only country in the region where three major global tobacco companies have factories. In Serbia, tobacco has been grown for centuries. Currently, the largest legal tobacco plantations are located in South Pomoravlje and Vojvodina. Several cigarette factories are running in the country, including Philip Morris International; Nis, formerly known as Tobacco Industry Nis; BAT Vranje, previously named Tobacco Industry Vranje; as well as JTI Senta and Monus Cigarettes.

    In December 2022, JTI inaugurated a new production line worth $16 million at its Senta factory and announced a new five-year investment cycle in Serbia worth $51 million.

    “When a Japanese investor comes to a country to invest in it, other investors from around the world also feel comfortable about investing in that country,” Serbian Prime Minister Ana Brnabic said during the opening ceremony. “That is why Japanese investments are so important in these difficult and challenging times.”

    JTI is the only foreign company that is purchasing locally grown tobacco. The new production line will double the capacity of the Senta factory and boost its export potential.

    Other market players also invested in their local operations. In 2020, BAT Vranje started the production of cigarettes under the Dunhill brand.

    The production of Dunhill in Vranje was called to increase BAT’s market share in Serbia and was in line with the company’s strategy to expand its presence in Southeastern Europe, the company said at that time. In addition, new investments were expected to bolster cigarette export from Serbia. The company estimated that it exported a third of its production in Serbia in 2020 compared to only 10 percent in 2016.

    Since emerging in the country in 2003, PMI has invested over $800 million in the Serbian affiliate, remaining one of the country’s largest investors. The Nis factory is one of the most advanced operations in PMI’s global network of factories.

    PMI saw its export from Serbia grow by a factor of 20 times between 2010 and 2020. Aleksandar Jakovljevic, managing director of PMI for Southeast Europe, said that the Nis factory had grown from a facility meant for the market of Serbia into a large regional and global production center, from which products were exported to more than 50 countries of the world.

    In other countries of the region, however, things are not so bright. In 2022, Fabrika Duhana Sarajevo in Bosnia and Herzegovina, one of the oldest tobacco factories, suspended operation due to financial difficulties. The supervisory board of Badeco Adria, owner of the factory, decided to close it down as losses in the previous three years totaled €3.8 million. In 2021, Novi Duvanski Kombinat Podgorica, a tobacco factory in Montenegro, also stopped operation, citing excessive administrative pressure as the main reason for this step.

    Despite the challenges associated with the illegal tobacco business, Serbia is expected to keep expanding cigarette production and export in the coming years, taking advantage of low production costs and its advantageous geographical position. A decisive victory against counterfeit cigarettes could fuel that growth, though it is unlikely to happen in the foreseeable future.

  • Hong Kong: Record Cigarette Seizures

    Hong Kong: Record Cigarette Seizures

    Photo: Panksvatouny

    Hong Kong customs seized 730 million illicit cigarettes in 2022, 76 percent more than in 2021 and the highest annual figure in more than two decades, reports The Standard.

    Officers processed 7,148 cases last year, including 3,436 involving cigarette smuggling and 931 involving drug trafficking.

    The illicit cigarettes confiscated in 2022 had a market value of HKD2.01 billion ($256.07 million) and a taxable value of around HKD1.4 billion, according to Customs and Excise Commissioner Louise Ho Pui-shan.

    Customs officials attributed the spike in illicit cigarettes to the rising tobacco price under inflation.

    The increased seizures follow a relaxation of immigration measures in multiple countries after the Covid-19 pandemic, Ho added, noting Customs would recruit 90 inspectors and 170 officers to strengthen the city’s enforcement capability.

  • Doing the Math

    Doing the Math

    Photo: Fran_kie

    The numbers presented on illicit trade (and many other topics) should not always be taken at face value.

    By George Gay

    Shortly before I was asked to write this story on the illegal trade in cigarettes, the U.K.’s prime minister, Rishi Sunak, came up with a plan aimed, I assume, at helping to ameliorate the damage done to the country by his and previous conservative governments since 2010. His idea was that all pupils should be made to study mathematics until the age of 18, an aim that included some obvious pitfalls. For instance, given the plan was put in place, increasing numbers of people would come into contact with imaginary numbers, and even numbers that are difficult to imagine, such as 0.0005, which is about the percentage of the population who voted for Sunak to become prime minister.

    Even if, like me, you’re not a mathematician, it’s worth keeping your eye on figures that are presented to you. And in this regard, I was intrigued by a press note announcing the publication of a paper by Researchers at the International Tobacco Control Policy Evaluation Project, the University of Waterloo, Canada, who were said to have “evaluated the impact of federal and provincial menthol cigarette bans in Canada by surveying smokers of menthol and nonmenthol cigarettes before and after Canada’s menthol ban.” The research study was said to have found that “banning menthol cigarettes does not lead more smokers to purchase menthols from illicit sources, contradicting claims made by the tobacco industry that the proposed ban of menthol cigarettes in the U.S. by the Food and Drug Administration will lead to a significant increase in illicit cigarettes.”

    However, even a person with a limited understanding of mathematics would have to wonder whether the study’s findings support this statement, even leaving aside the seemingly important issue that Canada isn’t the U.S. It seems to me that it is a bit of a leap to make the above claim when the number of menthol cigarette smokers who took part in the study seems to have been only 138 (the study included, too, 1,098 smokers of nonmenthol cigarettes, who were used, at least in part, as a “control group”).

    As I read things,* menthol cigarette smokers were surveyed in 2016, before the nationwide ban** was brought in, and again in 2018, after the ban was introduced. Of the 138 menthol cigarette smokers who were surveyed in 2018, only 36 reported smoking menthol cigarettes after the ban while brand checks indicated that only 17 were actually smoking menthol cigarettes at that time and that the most recent cigarette purchases of only 13 of those 17 had comprised menthol cigarettes. Again, as I read things, only nine of the 17 bought their menthol cigarettes from outlets on First Nations reserves, but, despite these tiny figures, the researchers present their results to the first decimal place and are happy to conclude that “After Canada’s menthol ban, there was no increase in illicit purchasing of menthol or nonmenthol cigarettes from First Nations reserves.”

    The press note seems to push that conclusion further. Its heading, “Study refutes industry claims that ban on menthol cigarettes leads to increased use of illegal smokes,” is not confined to First Nations reserves outlets but presumably encompasses the other outlets covered: convenience stores, the internet, supermarkets and bars/pubs.

    This is important, I think. You can imagine somebody in the future quoting the report by saying that 51.2 percent of sales of illicit menthol cigarettes in Canada post the menthol cigarette ban were made on First Nation reserves. That sounds impressive, of course, unless you know that the 51.2 percent figure is based on little more than a handful of purchases.

    What is the justification for trying to “save” menthol cigarette smokers, but not other smokers, from the consequences of their own actions?

    An Alternative Destination

    Having said that, my main gripe with the study was that it was superfluous, and yet the authors called in at least two places for further research into this matter. Why is money spent on such studies when the world is in desperate need of funding for basic science?

    I was never sold on the idea that a ban on menthol cigarettes would necessarily and greatly increase the sale of illicit products in the place where the ban was imposed. And I certainly wasn’t sold on the idea that you need to carry out studies to get to the bottom of this question, though I understand that they are needed to keep going the huge economic benefits to be enjoyed by the increasingly large, multi-faceted industry dedicated to making the lives of smokers more miserable.

    So the following is my contribution—an open-access, no-cost method of getting to the bottom of the menthol cigarette question. Wait until you are alone, sit down in a not-too-comfortable chair, switch off all electronic distractions, refrain from drinking alcohol and allow yourself the luxury of thinking; and, after a time, it will probably become clear that, assuming those selling menthol cigarettes post a ban will set their prices competitively, three major factors will interact to determine the level of sales of illicit menthol cigarettes in the place where such products are banned. Those are: the appeal of the products in the place where the ban is imposed, the efficiency of the authorities charged with preventing the manufacture and distribution of illicit products in that place and the ease with which the borders of the place can be sealed against the products.

    It is not difficult to figure out which countries would find it relatively easy to enforce bans on menthol cigarettes successfully and which would find it more challenging. And, as to the appeal of the products, it only needs to be remembered that the prohibition is not on cigarettes but on menthol. Importantly, the prohibition is not on nicotine, the thing that we are told keeps people coming back for cigarettes, but on a flavor that is preferred by a minority of smokers; so, without moving from my chair, I came to the belief that normally law-abiding, former menthol cigarette smokers were more likely to switch to nonmenthol brands than to go looking for illicit menthol cigarettes. And, in one sense, the research backs this up when it reports that of the 36 people who claimed to be smoking menthol cigarettes after the ban, 19 of them were mistaken. Of course, since the advent of the motor car and the tendency to speed has made most adults fairly flexible when it comes to obeying certain laws, and since it is possible that illicit menthol cigarettes might be offered to them in venues where alcoholic drink is being consumed and, therefore, decision-making flawed, a certain level of illegal trade has to be expected.

    But the fear of increasing the illegal trade is probably the least of any number of issues that are raised by bans on menthol cigarettes. One ethical consideration concerns discrimination. What is the justification for discriminating against menthol cigarette smokers? Or, looked at another way, what is the justification for discriminating against the smokers of nonmenthol cigarettes? What is the justification for trying to “save” menthol cigarette smokers, but not other smokers, from the consequences of their own actions?

    Rising Poverty

    But that’s enough from Canada. Let’s alight briefly in France where, in January, there was a report of a raid on an illicit tobacco factory that resulted in the seizure of more than 100 tons of tobacco-related products said to be worth €17 million ($18.7 million).

    Sitting in my chair, I wondered what I was supposed to make of this story. I guess it was meant to come across as a success in which the coordinated powers of national and international law and order foiled the activities of criminals. But I couldn’t help thinking that it described a failure since the main aim of law enforcement should be prevention rather than the clumsier activities associated with detection and prosecution. And there was a rather unpleasant aspect to the story, which described how the French police had arrested nine suspects, “most of them Moldovan nationals.” Unsurprisingly but unfortunately, we shall probably never know what brought these people to feel that their best hope was to live and work in a factory far from their home and constantly with the fear of detection.

    Could it be that they were financially impoverished? In a report in The Guardian on Jan. 23, wealth correspondent Rupert Neate quoted Nobel Prize-winning economist Joseph Stiglitz as saying that, in the period defined by the Covid pandemic and its aftermath, many people found life very difficult. And he added that, during the same period, it was shocking how many people and rich corporations made off like bandits. Those bandits, of course, will not be brought to justice.

    The question arises as to why it is seen as perfectly legitimate to create within the EU a fertile environment for the illegal trade in cigarettes by applying unfair levels of taxes while mandating that licit cigarettes should be as unpleasant as possible and then spend precious resources on hunting down those who try to get around such obstacles. With the advent of next-generation products (NGPs), the time is overdue for new thinking. Reduce taxes on cigarettes, remove the laws that require licit cigarettes to be unappealing, heavily promote alternative, low-risk tobacco and nicotine products, and the laws of competition will dissolve the problem of the illegal trade in cigarettes. 

    Of course, NGPs are not immune from being traded illegally, and I was intrigued by a recent press note from the U.K.’s Chartered Trading Standards Institute entitled “Illicit vapes top list of high street threats, say Trading Standards experts.” The note made some good points, but I was pulled up short by one comment. “It’s important we support retailers to ensure that products [vapes] are sold responsibly …. If we don’t, there’s a risk that products could be banned or overregulated, leaving smokers without the option of a product that carries a fraction of the risks of smoking and is an extremely effective aid to quitting.”

    At this point, I had to retire to my chair. What was this person saying? That he believes the U.K. government is so muddled in its thinking that it might ban vapes, a product that, in his own words, carries “a fraction of the risks of smoking” and comprises “an extremely effective aid to quitting [smoking],” if those products are sold to children? At the same time, he seemed to be implying that the government would not ban combustible cigarettes, the consumption of which is hugely riskier than is the consumption of vapes, and which are also sold to children.

    But perhaps he’s right to be concerned. You have to wonder whether the U.K. government isn’t a little hazy on questions of risk. Last year, while he was chancellor, Sunak was forced to pay a fine for breaking Covid-19 lockdown rules. And he started this year by having to pay a fine for traveling in a vehicle while not wearing a seatbelt.

    *Not being a mathematician nor a scientist, I had some difficulty following the figures, in no small part because percentages did not correspond with reported sample sizes, possibly because of the tiny sample sizes involved.

    **The report and the press note use, sometimes in the same sentence, both the words “ban” and “bans,” the latter to refer sometimes to provincial bans. I have used only “ban,” reflecting the fact that the menthol cigarette ban now applies nationwide, but I should point out that whereas the provinces introduced menthol cigarette bans between 2015 and 2018, the two surveys took place in 2016 and 2018.

  • Belarus Smugglers Busted in Poland

    Belarus Smugglers Busted in Poland

    Polish law enforcement officials have disrupted the operations of Belarusian tobacco smugglers and seizing large amounts of cash and valuables, according to Europol. The criminals were initially under investigation for drug trafficking in the Netherlands, Spain and the United Kingdom. Intelligence provided to the investigators by Europol revealed that the suspects were trafficking large quantities of tobacco products from Belarus to Poland. The proceeds of these criminal activities were laundered through cash conversion methods, property investments, the purchase of expensive luxury goods and the use of cryptocurrencies.

    Police detained 15 individuals and seized  considerable amounts of cash seized in zlotys, euros and U.S. dollars, along with gold bars, jewelry, and seven luxury vehicles. The total value of seizures amounted to €2 million ($2.14 million).

    Europol’s dissemination of intelligence packages has given investigators new insight into the criminal network. In addition to identifying tobacco smuggling as a source of income, investigators were now able to trace the illicit profits. Analysis of encrypted data intercepted from criminals’ phones also revealed locations used to hide large sums of cash. Europol provided an analyst and a specialist on-site to assist the 200 Polish law enforcement officers involved in the operation.

    The European Multidisciplinary Platform Against Criminal Threats (EMPACT) tackles threats posed by organized and serious international crime affecting the EU. EMPACT strengthens intelligence, strategic and operational cooperation between national authorities, EU institutions and bodies, and international partners. EMPACT runs in four-year cycles focusing on common EU crime priorities.