Tag: Belarus

  • E-cigs lumped with tobacco

    E-cigs lumped with tobacco

    The Belarusian president has signed a decree that lumps electronic-cigarette and heat-not-burn products into the same legislative framework as that covering traditional tobacco products, according to a Belarusian Telegraph Agency story.

    Under the decree, only economic entities of Belarus will have the right to engage in activities related to the production and sale of ‘systems for tobacco use, smoking electronic systems and liquids for them’.

    The decree imposes a ban on the open display of e-liquids in shop windows and on other points-of-sale equipment.

    It places restrictions on the places where electronic-cigarette and heat-not-burn products may be sold or consumed.

    And it bans the advertising of these products and their sale to minors.

    Finally, the decree extends the list of places where smoking is completely prohibited to include common areas of residential buildings, elevators, cars carrying children up to 14, children’s playgrounds, sports camps, education institutions, underground crossings, public transport stops.

  • Still waiting for Godot

    Still waiting for Godot

    The EU Commission said last week that the fight against the illegal tobacco trade is a ‘cross-border phenomenon that requires a global approach and international co-operation’.
    In answer to a number of questions by a member of the EU Parliament, it said also that the measures enshrined in the Protocol to Eliminate Illicit Trade in Tobacco Products, introduced through the World Health Organization’s Framework Convention on Tobacco Control (FCTC), which the EU had signed and concluded, aimed to address this problem.
    ‘Once entered into force, the FCTC Protocol will be the main tool to prevent illicit tobacco trade at the international level,’ it said.
    In a preamble to her questions, posed in December, the Lithuanian MEP, Laima Liucija Andrikienė, said the government of Belarus had recently announced that a private investor would increase the manufacturing capabilities of the Grodno Tobacco factory.
    According to the announcement, the increase in production was due to start in January 2018, in response to a growing demand for Belarusian cigarette brands.
    The EU was among the target markets.
    The MEP alleged that Belarusian cigarette brands manufactured at the Grodno factory were smuggled into more than 20 member states where they could not be legally sold.
    They already represented around EUR1 billion in yearly tax losses.
    Andrikienė asked:

    1. Will the European External Action Service (EEAS) address this issue with the government of Belarus?
    2. Will the EEAS request information about the member state markets on which Belarusian cigarette brands can legally be sold and how the exports will be tracked to avoid ruptures in the supply chain?
    3. Will the EEAS point out that low taxes applied in Belarus on cigarettes are the incentive for smuggling into the EU?

    In its reply, the Commission said that during the meeting of the EU-Belarus Co-ordination Group held in Brussels on December 19 and 20, the Commission services and the EEAS had raised the issue of the increased inflow of illicit cigarettes from Belarus to the EU and the decision by the Belarusian government to increase the production of cigarettes.
    ‘The Commission services and the EEAS have further invited Belarus to enhance the fight against illicit trade in tobacco products, strengthen the co-operation with the Commission and in particular with the European Anti-Fraud Office, sign and ratify the Protocol to Eliminate Illicit Trade in Tobacco Products to the World Health Organization’s Framework Convention on Tobacco Control (“FCTC Protocol”) and approximate its excise duty rates to the EU excise duty rates on manufactured tobacco,’ it said. ‘This issue will be followed up in bilateral dialogues with Belarus and in the EU-Belarus Co-ordination Group, which is the platform for political dialogue between the EU and Belarus.
    ‘In close co-operation with member states’ customs authorities, the Commission services monitor the illicit trade of tobacco products in the EU, including with respect to tobacco products originating in Belarus.
    ‘However, the fight against illicit tobacco trade is a cross-border phenomenon that requires a global approach and international co-operation.
    ‘The measures enshrined in the FCTC Protocol, which the EU signed and concluded, aim to address this problem.
    ‘Once entered into force, the FCTC Protocol will be the main tool to prevent illicit tobacco trade at the international level.’

  • Belarus upping production

    Belarus upping production

    A Lithuanian member of the EU Parliament has asked whether the European External Action Service (EEAS) is going to address the issue of cigarettes manufactured in Belarus being sold in EU member states.
    In a preamble to her questions, Laima Liucija Andrikienė said the government of Belarus had recently announced that a private investor would increase the manufacturing capabilities of the Grodno Tobacco factory.
    According to the announcement, the increase in production was due to start in January 2018, in response to a growing demand for Belarusian cigarette brands.
    The EU was among the target markets.
    The MEP alleged that Belarusian cigarette brands manufactured at the Grodno factory were smuggled into more than 20 member states where they could not be legally sold.
    They already represented around EUR1 billion in yearly tax losses.
    Andrikienė asked:

    1. Will the EEAS address this issue with the government of Belarus?
    2. Will the EEAS request information about the member state markets on which Belarusian cigarette brands can legally be sold and how the exports will be tracked to avoid ruptures in the supply chain?
    3. Will the EEAS point out that low taxes applied in Belarus on cigarettes are the incentive for smuggling into the EU?

    The EU Commission is due to answer these questions in writing.

  • Help of Belarus sought

    cigarette smuggling photo
    Photo by HM Revenue & Customs

    In an effort to halt the growing illegal tobacco trade between Belarus and countries of the EU, the EU Commission has called on the government in Minsk to raise its excise duty rates to EU levels, according to a story by Sarantis Michalopoulos for EurActiv.com.

    Günther Oettinger, the EU’s Budget Commissioner, was said to have, for the first time, recognized that low excise taxation on cigarettes in Belarus encouraged the illegal trade.

    The main drivers of cigarette smuggling from Belarus to the EU were the “big differences in fiscal charges on tobacco products,” he said on Wednesday.

    “To reduce cigarette smuggling from Belarus, the Commission would encourage Belarus, as well as other neighbouring countries, to approximate its excise duty rates to the levels in the EU,” Oettinger said.

    The EU Parliament recently called on the EU executive to tackle the illegal tobacco trade from Belarus.

    Oettinger responded last week by saying that Belarusian products accounted for about 10 percent of the illegal tobacco market in the EU.

    Project SUN, an annual study commissioned by the four major tobacco manufacturers was the first to estimate the scale of the illegal cigarette market in the EU. It found that extremely low excise taxes in Belarus incentivised tobacco smuggling to the EU.

    The average price of a pack of 20 cigarettes in Belarus is €0.58, while in Poland the average price is €3.13, in Lithuania €2.60, and in Latvia €2.86.

    Oettinger emphasised it was equally important for Minsk to strengthen its operational co-operation with the European Anti-Fraud Office (OLAF) and member states’ customs authorities.

    Nowhere was it mentioned that one of the main drivers of the illegal trade in any one country is simply the difference between the cost of manufacturing and distributing a pack of cigarettes, and the price at which it is offered to consumers after the imposition of tax.

  • Belarus braces for tax hike

    The Belarusian government will increase tobacco excise tax rates by between 50 percent and 100 percent, starting Jan.1, reports Oreanda-News.

    The excise tax rate on filtered cigarettes will increase by 55.6 percent to 110 percent, depending on the price group. The excise tax rates on smoking and pipe tobacco, and cigars will increase by 66.7 percent, while the rate on cigarillos will rise by 73.8 percent.