illicit cigarette trade: a global pandemic
TRANSCRIPT
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Illicit Cigarettes: A
Global Pandemic
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WHAT ARE THEY?
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Illicit cigarette trade
Contraband: cigarettes smuggled from abroad without domestic duty paid
Counterfeit: cigarettes manufactured without authorization of the rightful owners, with intent to deceive consumers
Cigarettes smuggled with intent to evade tax (FATF 2013)
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ILLICIT CIGARETTES
AROUND THE WORLD
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10.7% of total tobacco
sales are ILLICIT$50 billion in global government revenues lost due to illegal cigarettes
385 billion cigarettes smoked
annually are ILLICIThttp://tobaccoatlas.org/industry/illicit_cigarettes/market_share/http://www.cbsnews.com/8301-201_162-57604573/atf-lost-track-of-420-million-cigarettes-watchdog-says/
Cigarette smuggling has become more profitable than drug trafficking
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Malaysia has the highest
incidence of illicit cigarettes globally
34% of total market cigarettes are illicit (2012)
4 out of 10 cigarettes (9 billion sticks) smoked are
illegal
3rd highest cigarette prices in
ASEAN
http://tobaccoatlas.org/industry/illicit_cigarettes/market_share/http://www.cigaretteprices.netRejab, I. and Zain, Z. (2006) ‘Modus Operandi of Cigarette Smuggling’. South East Asia Tobacco Control Alliance, 1-44
Did you know?RM5
million gross income for
EVERY successful smuggling attempt
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• Weak law enforcement • High profits, low penalties• Long coast lines facilitate easy smuggling via boat• Established local distribution networks
Rejab, I. and Zain, Z. (2006) ‘Modus Operandi of Cigarette Smuggling’. South East Asia Tobacco Control Alliance, 1-44
High Levels of Cigarette Smuggling in Malaysia due to…
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DRIVERS OF ILLICIT
TRADE
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Rejab, I. and Zain, Z. (2006) ‘Modus Operandi of Cigarette Smuggling’. South East Asia Tobacco Control Alliance, 1-44
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ILLICIT CIGARETTE TRADE
LEADS TO…
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1 in 7 young smokers (14-15 yrs) buy illegal cigarettes from private addresses (UK)
22% of youth smokers in Ontario and Quebec regularly smoke illegal cigarettes
50% of youth smokers purchase cigarettes in unbranded plastic bags
No age verificationAffordable (cigarettes are half the
price and can be purchased single) Easily available at private houses or
at street vendors
Increased Incidences of Youth Smoking
Callaghan et al. (2009); Mecredy (2013)
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Cigarettes available at pocket money price
http://www.thestar.com.my/story.aspx?file=%2f2012%2f9%2f14%2ffocus%2f12024429
36.3% of boys in Malaysia (13-15) smoke
4.2% of girls in Malaysia (13-15) smokehttp://tobaccoatlas.org/fact_sheets/1925
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ILLICIT CIGARETTE TRADE
IS A GLOBAL PANDEMIC
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Illegal trade has social, economic, and health dangers
http://edition.cnn.com/2013/05/17/us/new-york-cigarette-ring/index.html
CNN report: Cigarette smuggling rings linked to terrorist funding
UK Press: IRA terrorists flood UK with potentially toxic fags
Reuters: Ukrainian smuggling tunnel to blame for human trafficking and contraband in Slovakia
Greek Press: Cigarette smuggling ring found to have Assad connections
Tobacco Asia: Illicit trade runs rampant in Malaysia
KPMG: Illicit Trade breaks another EU record for the 6th year in a row
http://www.tobaccoreporter.com/2013/05/illicit-trade-breaks-another-eu-record/
http://www.dailymail.co.uk/news/article-2336865/IRAs-cigarette-smuggling-millionaires-Former-terrorists-flooding-UK-potentially-lethal-fakes-cheating-taxpayers-billions.html
http://www.reuters.com/article/2012/07/19/us-slovakia-ukraine-tunnel-idUSBRE86I0ZO20120719
http://famagusta-gazette.com/massive-cigarette-smuggling-ring-may-have-assad-connections-p18504-69.htm
http://www.tobaccoasia.com/previous-issues/64-articles-q1-10/208-malaysia-struggles-to-curb-illicit-imports.html
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World Customs Organization: Cigarette smuggling may be linked to terrorist organizations
http://www.wcoomd.org/en/topics/enforcement-and-compliance/activities-and-programmes/ef_tobaccoandcigarettesmuggling.aspx
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http://edition.cnn.com/2013/05/17/us/new-york-cigarette-ring/index.html
CNN: Hamas and Hezbollah links found among NY smuggling ring
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http://www.dailymail.co.uk/news/article-2336865/IRAs-cigarette-smuggling-millionaires-Former-terrorists-flooding-UK-potentially-lethal-fakes-cheating-taxpayers-billions.html
UK Press: IRA terrorists flood UK with potentially toxic fags
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http://www.bbc.co.uk/news/uk-england-23086833
“Extensive customer base.” Sarah Smith (HRMC)
BBC: Dodgy cigarettes consumed by millions
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http://www.telegraph.co.uk/news/uknews/1436306/Smugglers-under-10000-ceiling-will-escape-a-prison-sentence.html
Cigarette smuggling incurs LOW penalties, HIGH rewards despite considerable social, economic, and health harm
UK Press: Cigarette smuggling is a lucrative, low risk activity for smugglers
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http://www.ottawacitizen.com/news/Police+break+alleged+tobacco+smuggling+ring/8554964/story.html
Canada: Clear link between drugs and tobacco smuggling
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http://www.reuters.com/article/2012/07/19/us-slovakia-ukraine-tunnel-idUSBRE86I0ZO20120719
Reuters: Ukrainian smuggling tunnel contributes to human trafficking and illicit cigarettes in Slovakia
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Fifteen suspected members of a massive cigarette smuggling ring.
Eleven containers stuffed with cigarette cartons, with a value of €100,000 have already left Famagusta to unknown destinations.
350 million illegal cigarettes still being sought by authorities.
Ship caught smuggling owned by member of Syrian president Bashar al Assad’s family.
http://famagusta-gazette.com/massive-cigarette-smuggling-ring-may-have-assad-connections-p18504-69.htm
Greek Press: Cigarette smuggling ring found to have Assad connection
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http://www.tobaccoreporter.com/2013/04/pakistan-has-175-8-million-reasons-to-curb-smoke-smuggling/
Tobacco Reporter: Pakistan’s government crippled by illicit trade
2015 illicit trade expected to reach 27.1 billion sticks, with corresponding revenue loss of Rs21 billion
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China Press: Youth recruited in cigarette smuggling activities
http://www.scmp.com/article/702243/arrests-double-trading-illicit-cigarettes
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Malaysian Press: Fears rise increased excise duty may spur illicit tobacco trade
http://www.thesundaily.my/news/843338; Asia-11 Illicit Tobacco Indicator 2012Excise Duty Applied to Cigarettes (Malaysia)
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Malaysian Press: Rural villages overrun with fake fags
http://www.theborneopost.com/2013/02/02/rm1-7-mln-largest-cigarette-bust-in-sabah/
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The Star (2012)
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Have significant societal consequences
Illicit cigarettes…Make smoking affordable to youth at pocket money price
Have clear links to organised crime
Are the most lucrative illicit activity and carries the least penalties
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Inside Illicit
Cigarettes…
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http://www.canada.com/victoriatimescolonist/news/canada/story.html?id=0b8b6e19-2b65-4b10-af51-aaacb5f81399
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Illicit cigarettes have been found to contain:
NO regulation
NO quality control5X more cadmium
3X more arsenic
Low manufacturing
standardsDirt
Rat and mouse
droppings
Dead insects
http://www.canada.com/victoriatimescolonist/news/canada/story.html?id=0b8b6e19-2b65-4b10-af51-aaacb5f81399
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http://www.canada.com/victoriatimescolonist/news/canada/story.html?id=0b8b6e19-2b65-4b10-af51-aaacb5f81399
Canadian Press: Insect eggs, mould, and human feces found in Illegal cigarettes
http://www.bbc.co.uk/news/uk-england-sussex-16786358
The Star 2011
BBC: Toxic risk of counterfeit cigarettes
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This Issue Has been
Recognised by Governments
Worldwide
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UK (1/09/2013): The Financial Times
http://www.ft.com/intl/cms/s/0/5d7b8b00-0fe3-11e3-a258-00144feabdc0.html#axzz2g5lPpB4W
• UK parliament home affairs committee investigates link between smuggling, organised crime, and paramilitaries
• Government enlists support from UAE to crack down on manufacturers in the Middle East
http://www.leinsterleader.ie/news/business/news/organised-crime-links-of-illegal-cigarette-trade-highlighted-at-naas-meeting-1-4838596
• Former Assistant Garda Commissioner highlights lack of public awareness on the link between organised crime and illegal cigarette purchase
Ireland (28/02/2013): Leinster Leader
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EU (6/06/2013): Published Communication
http://ec.europa.eu/anti_fraud/documents/2013-cigarette-communication/1_en_act_part1_v9_en.pdf
• European Commission publishes strategy booklet detailing necessary steps for combatting cigarette smuggling and illicit trade
• Recommendations include securing supply chain, modernising infrastructure and strengthening enforcement at major entry points (e.g. Greece)
Australian Crime Commission
http://www.crimecommission.gov.au/publications/organised-crime-australia/2013-report/crimes-mainstream-economy
• The Australian Customs and Border Protection Service pursued legislative changes to increase the penalties available for tobacco smuggling
• The option of jail terms up to 10 years came into effect in November 2012
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Malaysia (30/09/2013): Anti Illicit Trade of Tobacco Products Press Conference
Dato' Sri Mohamed Khalid Bin Yusuf, the former Director General of Royal Malaysia Customs Department, highlighted the need for close cooperation in tackling the issue."The Illicit trade in tobacco products is a global phenomenon involving trans-national criminal syndicates. Malaysia's long coastline and borders makes it an attractive target for the illicit cigarette trade. This trade seriously undermines Government revenue, and is linked to crime in our neighborhoods owing to its funding of other illegal activities. Addressing the problem requires strengthening international collaboration, a focused and coordinated approach among all national enforcement bodies, and mutual assistance between government, industry, and NGOs."
http://www.iticnet.org/Public/PublicDocLanding.aspx?id=41&type=Brussels
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Global Initiatives to Combat
Illicit Trade
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WHO: Protocol to Eliminate Illicit Tradeo International Treaty aimed at combatting illegal
tobacco trade via control of supply chain and international measure
o Parties commit to establishing global tracking and tracing system to reduce, and eventually eradicate illicit trade
o Protocol signed by representatives of all 6 WHO regions
http://www.who.int/mediacentre/news/releases/2013/fctc_20130110/en/
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European Union: Stepping up the fight against illicit tobacco
o Aims to focus resources on addressing all aspects of the problem:
• Secure supply chain more effectively• Strengthen enforcement efforts through cross-
department and cross border information sharing
• Modernise infrastructure for better detection• Address major entry points and weaknesses• Increase effectiveness of penalties
http://ec.europa.eu/anti_fraud/documents/2013-cigarette-communication/1_en_act_part1_v9_en.pdf
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UK: Get Some Answers about Youth Smoking Prevention and Support for Quitting Smoking
o Website created by The North England Tackling Illicit Tobacco for Better Health Programme
o Aims to inform and increase awareness of illegal tobacco, its impact, and consequences
o Website provides:• FAQs• Forums for discussion• Link to Crime Stoppers to report
illicit trade• Links to Quit Smoking resources
(NHS)
http://get-some-answers.co.uk/
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Ireland: Retailers Form Body to Campaign Against Illicit Trade
o Established in 2009 by retailers fighting against illicit tobacco trade
o 3,000 members and 15 corporate sponsorso Aims to:
• To raise awareness about cigarette smuggling and illegal cigarette selling among the public, media, and political system
• To raise awareness about the effects of illicit tobacco on retailers
• To liaise with relevant law enforcement authorities
http://www.retailersagainstsmuggling.ie/
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Singapore Customs: Don’t Get Burnt Initiative Highlighting Penalties for Illicit Trade
http://www.customs.gov.sg/insync/Issue10/spreadingthemessage.html
o To warn the public about the dangers and stiff penalties for activities involving tobacco trade
o Encourages citizens to report illegal activitieso Educates the public about identifying illegal cigarettes
through: Radio Cable Outdoor and print advertisements Roadshows Community engagement
o 30.4% decrease in number of illegal cigarette buyers caught
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Royal Malaysian Customs: Educating Retailers and Public about ‘Rokok Tak Sah’
o Aims to educate retailers and the public about the penalties of buying and selling illicit cigarettes
o Brochures and newspaper advertisements deployed to raise awareness of identifying illegal cigarettes
o Customs officers increased enforcement efforts to seize illegal cigarettes and fine retailers facilitating sales to the public
http://www.customs.gov.my/
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Convener of Hong Kong Fronts Campaign Against Illicit Tobacco
http://www.stopit.hk/?page_id=2&lang=en
o Advocacy organisation tackling the serious problems arising from the illicit tobacco trade in Hong Kong
o Represents those affected by illicit trade:• Small businesses• Trade associations• Individuals
o Aims to educate the public about social, economic and health dangers arising from illicit trade
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Royal Canadian Mounted Police Publish Contraband Tobacco Enforcement Strategy
o Aims to nationally reduce the availability of, and decrease the demand for contraband tobacco
o Works with youth to prevent involvement in crimes as an offender or victim
o Prioritises reducing the threat of criminal terrorist activity in Canada
http://www.rcmp-grc.gc.ca/pubs/tobac-tabac/tobacco-tabac-strat-2008-eng.htm
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How can you identify illicit
cigarettes in your area?
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Illegal Cigarette Brands in Malaysia
http://get-some-answers.co.uk/what-is-illegal-tobacco.aspx
Illicit cigarettes may have one or more of the following:•No pictorial health warnings •Poor detailing on cigarettes•No tax stamps or security marks•Unlisted importer or manufacturer•Unregistered brands•Less than 20 cigarettes per pack•Unusual taste•Very cheap price
Identifying illicit cigarettes
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Report any information to:• Local police • Customs • Crime Stoppers
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In summary….The prevalence of illicit tobacco trade undermines all tobacco
control efforts—propagating societal and economic issues that need to be urgently addressed through global cooperation to
combat illicit trade.
Hopefully this document was able to illustrate the scale and severity of this global pandemic, and will support efforts to
combat illicit trade worldwide.
By: Wern Tze Chan, Coventry University
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Get Informed on Illicit Tobacco Trade• http://geocurrents.info/economic-geography/global-patterns-of-tobacco-related-economic-issues• http://tobaccoatlas.org/industry/illicit_cigarettes/market_share/• http://www.cigaretteprices.net• http://www.who.int/mediacentre/news/releases/2013/fctc_20130110/en/• http://www.cmaj.ca/content/185/7/E287.full.pdf+html?sid=928e4611-57e7-415c-8a24-91451d482af0• http://www.cmaj.ca/content/181/6-7/384.full.pdf+html?sid=928e4611-57e7-415c-8a24-91451d482af0 • http://www.theglobeandmail.com/life/health-and-fitness/health/conditions/young-smokers-choosing-
contraband-cigarettes/article4268143/• http://www.mysihat.gov.my/v2/promosi/images/stories/pusatmaklumat/itcreport.pdf • http://www.thenews.com.pk/Todays-News-3-202410-Body-to-curb-sale-of-illicit-cigarettes• http://www.rcmp-grc.gc.ca/qc/nouv-news/com-rel/2012/10/121009-eng.htm • http://www.ontario.ca/illegaltobacco• http://www.health.gov.au/internet/yourhealth/publishing.nsf/Content/Phillip-Morris-Limited~Phillip-
Morris-Limited-5• http://www.keep-it-out.co.uk/home.aspx• http://www.stopillegalcigarettes.co.za/article/228• http://www.customs.gov.sg/insync/Issue10/spreadingthemessage.html• http://www.wcoomd.org/en/topics/enforcement-and-compliance/activities-and-programmes/
ef_tobaccoandcigarettesmuggling.aspx• http://www.wcoomd.org/en/topics/enforcement-and-compliance/activities-and-programmes/~/
media/WCO/Public/Global/PDF/Topics/Enforcement%20and%20Compliance/Activities%20and%20Programmes/Illicit%20Trade%20Report%202012/WCO%20REPORT%202013%20-%20BR.ashx
• http://www.thesundaily.my/news/834852