Cigarette Smuggling
SEATCA rejects tobacco research findings
http://www.mb.com.ph/seatca-rejects-tobacco-research-findings/
The Southeast Asia Tobacco Control Alliance (SEATCA) has stamped “Failed” a new tobacco industry research funded by a giant cigarette firm on illicit trade in 14 Asian countries, including the Philippines.
Failed: A Critique of the ITIC/OE Asia-14 Illicit Tobacco Indicator 2013 (full text), see:http://seatca.org/dmdocuments/Asia%2014%20Critique_Final_20May2015.pdf
Last year, a giant tobacco firm funded a second research on illicit trade of tobacco products in Asia, called “Asia-14 Illicit Tobacco Indicator” which was carried out jointly by a Washington based group, International Tax and Investment Center (ITIC) and a UK group, Oxford Economics (OE).
“It is no surprise that the findings of this research, like its predecessor (Asia-11 Illicit Tobacco Indicator 2012), are pro-tobacco industry, SEATCA said.
The Asia-14 Report claimed that the 341.2% excise tax increase (2.72 to 12 pesos) in the Philippines last January 1, 2013 was the main driver of the alleged large volume increase in Illicit Consumption at 198% or 18.1% of Total Consumption.
An alleged 89.8% of Illicit Consumption and 16.3% of Total Consumption in 2013 was attributed to Domestic Illicit Consumption which was estimated to have grown to 11 billion cigarettes based on the Asia-14 Report.
However, like its predecessor (Asia-11 Illicit Tobacco Indicator 2012), the research findings are biased to an international tobacco company, SEATCA said.
In conjunction with the recent World No Tobacco Day, SEATCA pointed out in their critique that the Asia-14 Report failed to highlight significantly higher tax revenues after the 2013 excise tax increase; for tobacco excise alone, the government collected P70.4 billion, higher by 113.7% compared to 2012. Excise revenue gains were therefore 454% higher than the Asia-14 Report’s estimated excise tax losses in 2013. In effect, SEATCA’s critique disproves allegations that the Bureau of Internal Revenue (BIR) is losing revenues through illicit tobacco trade. BIR Commissioner Kim Henares earlier said the overwhelming growth in sin tax collection was an indication of the inconclusiveness of the Asia-14 report alleging the fast-rising illegal cigarette trade in the country.
According to the main reviewer of the research, Prof. Hana Ross, Principal Research Officer of the Economics of Tobacco Control Project at the University of Cape Town, “The Asia-14 report fails to provide scientifically sound and unbiased information to policy makers and other tobacco market stakeholders.
“The reason for this is simple. The figures and statistics it reports are products of either incorrect or unverified/unverifiable estimation methods applied to often questionable data from multiple sources that do not blend,” Ross said, adding “that the quality of the original data collection is questionable due to the lack of representativeness and possibly intended bias. Many secondary data come from sources with an obvious conflict of interest.”
“More seriously, the report is full of errors and mistakes, which is surprising given the ‘commercial’ quality of the results. For example, the report does not make any distinction between smoking incidence and smoking prevalence, even though these are two very different concepts. It also confuses ‘sales’ and ‘consumption,’ two fundamental concepts on which the calculations are based.” She emphasized that: “While illicit tobacco trade is a problem that requires government attention, it is often blown out of proportion and out of context by the tobacco industry in order to discourage governments from increasing tobacco taxes and implementing other regulatory measures.” Dr. Ulysses Dorotheo, SEATCA’s FCTC program director, said: “Governments should reject partnerships and non-binding agreements with the tobacco industry to solve illicit trade. Instead, governments should secure the supply chain in accordance with measures contained in the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, which was adopted in 2012 by the 180 Parties to the WHO Framework Convention on Tobacco Control (FCTC).
The new report claims to take advantage of newly available data and improved methodology and covers all 10 ASEAN member nations plus Australia, Hong Kong, Pakistan and Taiwan.
Here are the other major concerns of the failed report:
• Different sources and methods are used across countries, leading to results that are not comparable to one another, yet presented for comparison, without acknowledgement of their distinctions.
• As was pointed out in the SEATCA critique of the Asia-11 report, no rationale is given for including or excluding countries from coverage in this report. The report excludes many of the region’s largest cigarette-consuming countries, such as China, Japan, and South Korea while including Pakistan, geographically an outlier.
• Many methodological approaches are either weak or lack sufficient description that would allow to judge their merits.
• The quality of the original data collection is questionable due to the lack of representativeness and possibly intended bias.
• Many secondary data come from sources with an obvious conflict of interest. Beyond these weaknesses, the Asia-14 report in many cases fails to provide sufficient description of data used to generate the estimates. This lack of transparency makes it difficult, if not impossible, for the report to be fully analyzed or critiqued; it certainly prevents replication of the report’s estimates and other statistics. Even the authors’ self-described attempt to provide more detail in the Annexes of the report falls short of the level of disclosure provided in academic studies and does not permit thorough evaluation. (Jun Ramirez)
KLIA customs foil RM4m cigarette smuggling attempt
http://www.thesundaily.my/news/1474841
SEPANG: Kuala Lumpur International Airport (KLIA) Customs Department seized 40,000 cartons of cigarettes with unpaid duties amounting of RM4 million on June 24.
KLIA Customs director Datuk Chik Omar Chik Lim said in the 5pm operation, a 40-feet container was impounded at West Port in Port Klang which was carrying goods from China.
“The items were declared as 928 cartons of plastic products comprising chopsticks, containers, bottles and wares worth RM109,431.95.
“But upon closer checks, officials found that there were 8,000,000 sticks of illegal cigarettes in 800 packs worth RM400,000,” he said.
Chik Omar said authorities were in the process of tracking down the culprit behind the smuggling attempt.
“We attempted to contact the company but the name and address provided were false,” he said.
The offence was investigated under Section 133(1)(a) of the Customs Act 1967, which carries the maximum punishment of a RM500,000 fine, or five years jail, or both.
Meanwhile, Customs also thwarted three attempts to smuggle in drugs worth more than RM1.6mil with the arrests of two foreigners, including a Ukraine woman, between May 11 and June 15.
Chik Omar said in the first case, a 35-year-old Indian man was detained at about 6.45am at the Kuala Lumpur International Airport 2 (KLIA2) with 6.3kg of methamphetamine worth over RM1.2mil.
The illicit item was stashed in a secret compartment of the suspect’s luggage who had just arrived from Bangalore, India, on May 11.
“The drugs were concealed in 49 scent sticks,” he said.
In the second case, two parcels containing with a combination weight of 840g methamphetamine were confiscated at a courier service centre at the KLIA on May 18.
The parcels, which arrived from Shenzen, China, arrived on May 13 but were not claimed, despite calls being made to two individuals who allegedly lived in Kuala Lumpur.
“Intelligence led us to the seizure of the parcels. We found each of the parcels contained an alloy roller which had white powder, believed to be methamphetamine, stuffed in it.
“The drugs are worth about RM157,700,” he said.
A 27-year-old Ukraine woman was arrested for attempting to smuggle in about 2kg of syabu worth RM392,920 stuffed in containers disguised as whitening facial cream.
The woman had just arrived from Hong Kong on June 15 but was immediately held at the KLIA for acting suspiciously.
Chik Omar said all suspects had been charged in court.
“Our effort to curb illegal smuggling is ongoing,” he said.
Customs foils suspected sea-bound smuggling of illicit cigarettes
http://7thspace.com/headlines/511719/customs_foils_suspected_sea_bound_smuggling_of_illicit_cigarettes.html
Hong Kong (HKSAR) – Hong Kong Customs smashed a suspected sea-bound smuggling case of illicit cigarettes at the seashore in Lau Fau Shan this morning (June 27). About 210 000 sticks of suspected illicit cigarettes were seized and the estimated market value and duty potential were about $600,000 and $400,000 respectively. A 45-year-old man was arrested and the light goods vehicle used for conveying the illicit cigarettes was detained for investigation.
Customs mounted an anti-illicit cigarette operation in Lau Fau Shan at about 4am today.
In the operation, Customs officers found a porter moving goods to a light goods vehicle near the seashore. Customs officers intercepted the 45-year-old porter and searched the vehicle. About 210 000 sticks of suspected illicit cigarettes contained in 21 foam boxes were found in the light goods vehicle.
Under the Import and Export Ordinance, smuggling is a serious offence.
The maximum penalty is a fine of $2 million and imprisonment for seven years.
Under the Dutiable Commodities Ordinance, anyone involved in dealing with, possession of, selling and buying illicit cigarettes commits an offence. The maximum penalty on conviction is a fine of $1 million and imprisonment for two years.
Members of the public are urged to report any suspected illicit cigarette activities to the Customs’ hotline at 2545 6182.
WCO Knowledge Academy 2015 – Excisable Products and Illicit Trade Module
http://www.iticnet.org/news-item/wco-knowledge-academy-2015–excisable-products-and-illicit-trade-module
WCO Knowledge Academy 2015 – Excisable Products and Illicit Trade Module
By Elizabeth Allen, Program Advisor, ITIC
For the fourth consecutive year, ITIC developed an excise-related module for the World Customs Organization as part of its’ annual two week Knowledge Academy. The Knowledge Academy provides customs officials from around the world with an opportunity to learn about the latest trends and good practice in a range of different customs related issues as part of their continuous professional development.
ITIC Program Advisor, Liz Allen, put together a two-day module on excisable products and illicit trade with the assistance of the WCO, who provided some of the speakers. Other speakers were drawn from ITIC industry sponsors in excisable products, Spirits Europe, Euromonitor International and Interpol.
Knowledge Academy delegates are able to attend a number of different modules according to subjects that are of interest to them. Consequently, the numbers present for the different sessions varied over the two days. The class list included delegates from Ireland, Australia, Malaysia, Sri Lanka, DR Congo, Ethiopia, Cuba, Cameroon, Cote d’Ivoire, and Angola. Participants included Directors and Deputy Directors-General of Customs and Revenue Authorities, two private sector delegates and a representative from the World Health Organization.
All presentations commissioned by ITIC will be available on the ITIC website and the full range of presentations will be available to WCO members on their members only website.
Mr. Andy Logan (Oxford Economics) and Ms. Liz Allen (ITIC)
Ms. Liz Allen (ITIC), Ms. Helen Smith (Euromonitor Int.), and Ms. Nehna Rauf (Euromonitor Int.)
Customs detects suspected case of illicit cigarettes concealed in fake dip soldering devices
http://7thspace.com/headlines/511558/customs_detects_suspected_case_of_illicit_cigarettes_concealed_in_fake_dip_soldering_devices.html
Hong Kong (HKSAR) – Hong Kong Customs detected a suspected case of using fake dip soldering devices to conceal illicit cigarettes today (June 25) at Lok Ma Chau Control Point. About 800 000 sticks of suspected illicit cigarettes were seized on an incoming lorry. The total market value of the cigarettes was about $2.2 million with a duty potential of about $1.5 million.
In the operation, a 45-year-old male driver was arrested and the lorry used in the suspected smuggling of illicit cigarettes was seized.
Customs officers at Lok Ma Chau Control Point this morning intercepted an incoming lorry declared to be carrying a batch of express cargo. After thorough inspection, Customs officers found about 800 000 sticks of suspected illicit cigarettes inside 58 fake dip soldering devices. It was believed that speedy distribution of the illicit cigarettes to various buyers in the territory would be arranged.
A Customs spokesman said today, “Hong Kong Customs will continue to carry out stringent enforcement action against the smuggling of illicit cigarettes at boundary control points.”
Under the Import and Export Ordinance, smuggling is a serious offence.
The maximum penalty is a fine of $2 million and imprisonment for seven years.
Members of the public are urged to report suspected illicit cigarette activities by calling the Customs 24-hour hotline 2545 6182.
Phoenix TV host gets suspended jail term for smuggling
Jun 16, 2015
A television host with Hong Kong-based Phoenix TV has been given a suspended jail sentence and fined HK$5,500 (US$709) for cigarette smuggling.
Ma Bin, a former presenter with state broadcaster CCTV, admitted to two counts of smuggling-related offenses — possession of dutiable commodities and failure to declare them to customs authorities.
Principal Magistrate Bernadette Woo Huey-fang scolded Ma, saying that as a representative of China, he should be careful about his words and behavior and should set a good example, before sentencing him to a month’s imprisonment suspended for one year.
Ma, 42, was held by Hong Kong customs authorities on June 4 while trying to smuggle 405 cigarettes from mainland China.
The cigarettes were subject to a HK$772 tax, according to Apple Daily.
Ma hid them in a toy box and told customs officers he had no room for them in his luggage when the items were discovered, TVB News reported.
Ma’s lawyer, Chan Ka-wing, had argued Ma merely forgot to pay the tax because he used the customs green channel, which is for people who have nothing to declare.
http://www.ejinsight.com/20150616-phoenix-tv-host-gets-suspended-jail-term-for-smuggling/
Illegal immigrant jailed as £100k of tobacco seized
http://www.southwales-eveningpost.co.uk/Illegal-immigrant-jailed-100k-tobacco-seized/story-26694995-detail/story.html
Trading standards officer Rhys Harries with the seized haul.
AN illegal immigrant living in Swansea has been sentenced to 15 months in prison after being caught with more than £100,000 worth of counterfeit tobacco.
Ming Chen, of Richardson Street in Sandfields, pleaded guilty to the illegal sale, manufacture and distribution of counterfeit tobacco.
The 170 kg counterfeit tobacco is thought to have a combined street value well in excess of £100,000.
The investigation by Swansea Council’s trading standards department led to the seizure of the tobacco along with all the packing equipment including plastic pouches and holographic stickers.
Officers from the council’s trading standards made the discovery at Chen’s flat in March.
Chen pleaded guilty to one count of fraud and seven further counts of possessing counterfeit tobacco and pouches.
Chen was also ordered to pay £120 victim surcharge.
Cabinet member for wellbeing and healthy city Mark Child said: “This is a significant find for our trading standards team and one which has resulted in a large quantity of counterfeit tobacco being removed from the streets of Swansea.
“This type of activity has links to serious organised crime and we are doing what we can in partnership with police to ensure that it is stopped in Swansea.
“I am pleased that trading standards have been successful and we will continue to take decisive steps to remove illegal tobacco from the streets.”
Members of the public with concerns about the sale of illegal tobacco in their community are encouraged to report the matter to the trading standards service on 01792 635600.
Industry-funded Report on Illicit Trade in South East Asia Lacks Credibility
RESEARCH ALERT
Late last year, the International Tax and Investment Center (ITIC) and Oxford Economics released a report on illicit trade in tobacco products in 14 countries in Asia. The report was a follow-up to their 2012 attempt to estimate the scope and composition of illicit tobacco consumption in Asia. The South East Asia Tobacco Control Alliance (SEATCA) recently assessed the quality of the new report in Failed: A Critique of the ITIC/OE Asia-14 Illicit Tobacco Indicator 2013. The SEATCA critique examines the methods and data used in ITIC report, concluding that the report lacks integrity and is biased. The problems in the ITIC report, which was funded by the multinational tobacco company Phillip Morris International, fall into four general categories: methods and data issues, lack of sufficient detail to permit assessment and replication, selective presentation of results, and mistakes and errors.
Key Findings
The SEATCA critique found numerous deficiencies in the ITIC report. Among them are:
Different sources and methods are used across countries, leading to results that are not comparable to one another, yet presented for comparison.
No rationale is given for including or excluding countries from coverage in the report.
Many of the methods used to measure illicit trade in the countries are either weak or lack enough detail to allow for a judgement about their strength.
The quality of the original data collected is questionable because it is not representative and could be intentionally biased.
Many secondary data come from sources with an obvious conflict of interest; for example, the tobacco industry.
The findings are selectively presented. The report highlights examples of increasing illicit consumption while neglecting to point out examples of declines or where there have been no changes in markets.
The report contains many errors and mistakes. For example, it fails to distinguish smoking incidence (how many people per year begin to smoke) and smoking prevalence (the proportion of the population that smokes), even though these are two very different concepts.
Key Messages
Policymakers should reject the ITIC/OE Asia-11 report because it is not an independent study, uses flawed methodology, and results in skewed findings supportive of the tobacco industry positions on taxation.
Countries should implement Article 5.3 Guidelines of the Framework Convention on Tobacco Control and reject any partnership with the tobacco industry and its representatives in tackling the illicit tobacco trade problem.
Countries should step-up enforcement to reduce illicit tobacco trade.
Countries should ratify the Protocol on Illicit Trade of Tobacco Products.
Full Citation: Southeast Asia Tobacco Control Alliance (SEATCA). Failed: A Critique of the ITIC/OE Asia-14 Illicit Tobacco Indicator 2013. Bangkok: SEATCA. June 2015.
Full text [ENGLISH ONLY] available at: http://seatca.org/dmdocuments/Asia%2014%20Critique_Final_20May2015.pdf
SEATCA is a multi-sectoral alliance established to support ASEAN countries in developing and putting in place effective tobacco control policies.
If you have questions about the report, please email author Hana Ross at hzarub1@yahoo.com or SEATCA Research Coordinator Sophapan Ratanachena at sophapan@seatca.org.