Category: Illicit Trade

  • Tracking compromised

    Tracking compromised

    The International Tax Stamp Association (ITSA) has warned that there are ‘failings and loopholes’ in EU plans for tobacco security, according to a story in Packaging News.

    The organization is concerned about the implementation of the track-and-trace and security-feature requirements of the EU’s Tobacco Products Directive.

    It said that the draft legislation gave no guarantee of independence from the tobacco industry and that it did not provide strong authentication tools for controllers and consumers.

    Juan Yañez, chair of the ITSA, is due to highlight the group’s concerns to members of the European parliament.

    He said that manufacturers could “manipulate” the unique identifier for track and trace purposes, because they would be able to print it onto cigarette packs themselves, or even not print it at all.

    The Packaging News story is at: https://www.packagingnews.co.uk/news/tax-trade-body-warns-eu-tobacco-track-trace-plans-21-09-2017.

  • Growers left indebted

    Growers left indebted

    Drought and extremely high temperatures have decreased leaf tobacco yields by 30-40 percent in the Semberija and Posavina regions of Bosnia-Herzegovina, according to a Onasa News Agency story relayed by the TMA.

    About 104 tobacco farmers belonging to the AD Duvan co-operative this year grew tobacco on 304 ha in the two regions.

    But because of the unhelpful weather, they are thought to have produced 350,000 kg of tobacco this year; not the 500,000 kg that had been predicted earlier in the season.

    AD Duvan director Čedo Gotovčević said tobacco farmers would be left in debt due to the poor yields and low purchase prices.

    But there had been an increase in black market trade, Gotovčević added, with about 60 percent of tobacco producers ‘turning to illegal flows’, where purchase prices were high.

  • Illegal trade targeted

    Illegal trade targeted

    The Brazilian Institute of Competitive Ethics and the City of São Paulo have launched a movement to combat smuggling and the sale of counterfeit products, according to a note posted on the US Center for Regulatory Effectiveness’ (CRE) website.

    The goal is to attract to the movement Brazil’s largest cities, where such illegal trade is strong.

    The CRE story said that, in Brazil, the illegal market ‘generates a loss of R$49 billion (US$16 billion) in tax revenue each year, according to a survey by the National Fund Against Piracy and Illegality’.

    The movement’s plan, prepared in partnership with business entities, is said to provide for integrated action by federal, state and municipal bodies, and the creation of a committee charged with outlining actions to combat the illegal activities.

    Sixteen areas of the economy highly affected by smuggling and counterfeiting have already been identified.

    One, of course, is the cigarette industry. “In addition to currency evasion, this problem increases unemployment,” Liel Miranda, president of Souza Cruz, was quoted as saying.

    Smuggled cigarettes are said to account for 41 percent of the tobacco market in Brazil, which has the second largest smuggled sector after Malaysia, with 51 percent.

  • Tracking tobacco costly

    Tracking tobacco costly

    The chief executive of the UK’s Association of Convenience Stores, James Lowman, has said that EU regulations governing the operation of track-and-trace systems for tobacco products will place significant cost and time burdens on retailers, according to a Talking Retail story relayed by the TMA.

    In the EU, the revised Tobacco Products Directive (TPD) foresees the adoption of a track-and-trace system for cigarettes and roll-your-own tobacco by May 2019 and for other tobacco products by 2024.

    Lowman said it was important to combat the illegal tobacco trade across the supply chain.

    However, he said: “[T]hese regulations would place a significant cost and time burden on retailers, requiring them to register and pay for identifier codes for both their overall business and each individual store, and produce them each time they purchase tobacco”.

    Article 8 of the revised TPD was said to have provided for the establishment of ‘a global tracking and tracing regime, proposed by the European Commission’s consultant Everis, consisting of national and regional systems…’.

    Lowman said his association would be working with the UK government and the EU to amend the regulations.

    A consultation on the proposals is due to run until October 2.

  • IMPACT funding announced

    IMPACT funding announced

    Philip Morris International announced yesterday 32 projects that had been selected for the first funding round of PMI IMPACT, a global initiative aimed at supporting organizations in developing and implementing projects dedicated to fighting illegal trade and related crimes.

    PMI said in a note posted on its website that the PMI IMPACT Expert Council had reviewed and selected the projects from more than 200 proposals that had come from public, private, and academic organizations in 18 countries.

    It said the grants that would be allocated in the first round of PMI IMPACT amounted to about US$28 million.

    “The creative solutions and innovative actions proposed by the selected projects can significantly help advance the global efforts against illegal trade and contribute to alleviating the pervasive consequences of crime on our economy, society, and global security,” said Jürgen Storbeck, Expert Council member. “We congratulate the successful applicants for their excellent proposals, which we now look forward to seeing implemented.”

    The selected projects are said to cover a broad range of activities in the EU and neighboring countries, in line with the theme of the first round.

    Many of the projects would go beyond tackling the illegal tobacco trade to explore the nexus between organized crime, terrorism, online- and offline-trafficking, and the interdependencies between different forms of illegal trade.

    “It is impressive to see such a wide range of new approaches that address the core of this complex problem,” said Alvise Giustiniani, PMI’s vice president illicit trade strategies and prevention.

    “Illicit tobacco trade is just one face of a growing web of crimes, and we know that it’s only through co-ordinated actions of many public and private actors that we can put an end to these illegal activities that harm consumers, damage businesses, and allow criminals to prosper.”

    The projects, which are expected to be completed over the next two years, include:

    • Research exploring the scope and drivers of illegal trade;
    • Technical solutions and equipment to support law enforcement operations;
    • Activities to enhance the capacity and proficiency of law enforcement agencies and other actors; and
    • Education and awareness programs, including initiatives for greater cross-sector collaboration.

    A list of the selected projects is available on the PMI IMPACT website:

    http://www.pmi-impact.com/updates/firstfundinground

    PMI, which has pledged US$100 million for three funding rounds of PMI IMPACT said it would soon call for project proposals for its second funding round.

  • BAT in Papua agreement

    BAT in Papua agreement

    British American Tobacco has signed an agreement with the Royal Papua New Guinea Constabulary aimed at enhancing intelligence sharing in respect of illegal trade, according to a story in Papua New Guinea Today relayed by the TMA.

    Papua New Guinea is said to lose K250 million (US$78 million) annually to tax evasion.

    The co-operative relationship will include also various government departments and other law enforcement agencies.

    BAT director Naved Manzoor reportedly said that there were social and economic repercussions to the illegal trade. “When the money is not coming in through the right channel both the industry and the government is being depressed…,” he was quoted as saying.

    “The more serious thing is the social aspect. From our experience from across the world, we are seeing that this illicit money which is supposed to be diverted to the economy has been used to conduct illegal activities.”

    Police Commissioner Gary Baki said illicit trade remained a challenge for the RPNGC, which had a transnational crime unit and was in dialogue with other Pacific Island countries. “If we can talk about partnerships with other countries and cannot control what is happening in our country, I think that is a big challenge for us…,” he said.

    “Entering into this MOA [memorandum of agreement] gives us a stepping stone now to work together and curb this sale of illicit tobacco in the country…”

  • Small-pack claims denied

    Small-pack claims denied

    The Malaysian Health Ministry has dismissed rumors that packs with fewer than 20 cigarettes would be allowed to return to the local market, according to a story by Nora Jaswa for FreeMalaysiaToday.com.

    It was widely reported, including here, yesterday, that Charles Santiago, the member of parliament for Klang, had said there was ‘talk’ that 10-stick cigarette packs – what he referred to as ‘kiddie packs’ – would be allowed to go on sale to combat the sale of illegal tobacco.

    But the Health Minister Dr. S Subramaniam said the ministry would not give approval for the sale of such packs.

    “The rumors of the ‘kiddie packs’ being sold are not true,” he was quoted as saying. “The ministry has not endorsed it.

    “Legislation prohibits the sale of small packs of cigarettes of fewer than 20 sticks. This is also consistent with the Framework Convention on Tobacco Control (FCTC) which Malaysia is a part of.”

  • No distribution ambitions

    No distribution ambitions

    The EU Commission has said that it has no plans to propose the setting-up of a centralised European agency or governing body for the distribution of tobacco products.

    The Commission’s comment came in reply to a question posed by Cătălin Sorin Ivan a Romanian member of the EU Parliament.

    Ivan had asked whether it was true that the Commission was proposing to set up a new central European agency, namely a governing body that would centralize the entire distribution of tobacco products.

    ‘If this is not the case,’ he asked, ‘is the Commission indeed proposing to set up a body, and if so, what would its competition be and what would its competences be?’

    In reply, the Commission said it had no ‘current plans to propose the establishment of a centralised European agency or governing body for the distribution of tobacco products’.

    ‘The Commission is currently working on the implementation of the systems of traceability and security features for tobacco products provided for under Articles 15 and 16 of Directive 2014/40/EU and has published an indicative implementation timeline on its website,’ it added.

  • EU eyes extending excise

    EU eyes extending excise

    The EU Commission has said that it is looking at whether the tobacco excise system should be extended to cover unmanufactured tobacco.

    The Commission made its comment in reply to two members of the EU parliament who had asked what the Commission was doing to fight ‘bulk tobacco inflows into the European Union’.

    In a preamble to their question, the Italian MEP, Fulvio Martusciello, and the Slovenian MEP, Patricija Šulin, said the fight against the illegal tobacco trade centered largely on manufactured cigarettes.

    However, according to a study carried out by the Universita’ Cattolica del Sacro Cuore and Transcrime in December 2016, the illegal trade in bulk tobacco, or the sale of unbranded cut tobacco outside legitimate channels, had been increasing.

    More than €870 million per year was lost in eight EU member states alone, a considerable proportion because of inflows from outside the EU, mainly from Bosnia and Herzegovina.

    The illegal tobacco trade was in breach of the competition laws laid down in Article 101 of the Treaty on the Functioning of the European Union, but bulk tobacco had never been cited as a growing problem.

    ‘In the light of the above information, what is the Commission doing to fight bulk tobacco inflows into the European Union?’ they asked.

    In answering, the Commission said it considered smuggling of bulk tobacco a growing and worrying phenomenon. The diversion of bulk tobacco of both EU and non-EU origin to be used for illicit cigarette production or roll-your-own cigarettes had been identified as an increasing problem within the EU and caused losses of excise duties for member states.

    The Commission said it had adopted in 2013 a comprehensive strategy to combat the illicit tobacco trade and had been implementing it in close co-operation with member states.

    ‘In addition, to address more specifically the issue of bulk tobacco smuggling, the Commission is currently carrying out a review of Directive 2011/64 on the excise duty applied to manufactured tobacco,’ the Commission said. ‘One of the issues that the Commission is looking at in that context is whether to extend the excise system to raw tobacco, which is currently exonerated from excise duties.’

  • Barred from selling tobacco

    Barred from selling tobacco

    Twelve retailers in Singapore have had their tobacco retail licenses suspended and one has had its license revoked after they were caught selling cigarettes to people under the age of 18, according to a Today story quoting the Health Sciences Authority (HSA).

    Value Supermart, at 301 Serangoon Avenue 2, had its license revoked after it was caught selling cigarettes to a 17-year-old in school uniform.

    Under Singapore law, retailers caught selling cigarettes to minors have their tobacco retail license suspended for six months for the first offence and revoked on the second offence.

    However, any outlet caught selling tobacco products to people under 18 and wearing school uniform, or those under 12 years of age, have their license revoked even for a first offence.

    Meanwhile, 12 other outlets have been suspended from selling tobacco products for six months after they were caught selling cigarettes to minors who were not in school uniform.

    All 13 retailers, which were first-time offenders, did not ask for any form of identification when they sold cigarettes to minors, claiming that they were busy or that the minors looked older than they were, the HSA said.

    The HSA has suspended the tobacco retail licenses of 53 outlets and revoked those of nine others since 2015.

    ‘Sellers take the risk of contravening the laws if they assess age by mere physical appearance of the buyer,’ the authority said.