Cigarette Smuggling
Customs smashes illicit cigarette smuggling case in Lok Ma Chau
Hong Kong (HKSAR) – Hong Kong Customs today (June 27) smashed an illicit cigarette smuggling case at Lok Ma Chau Control Point. On board a cross-boundary lorry, a total of 86 boxes containing around 1.05 million sticks of duty-not-paid cigarettes were found. The total value is about $2.6 million with a duty potential of about $1.8 million.
In the operation, a 47-year-old man was arrested and the lorry was also seized.
At about 6.45am this morning, Customs officers at Lok Ma Chau Control Point intercepted a logistics lorry. Upon X-ray inspection, 1.05 million sticks of duty-not-paid cigarettes were found while the driver was arrested immediately.
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.
Customs will continue to take stringent enforcement against cigarette smuggling activities to protect government revenue.
Members of the public are urged to report any suspected illicit cigarette activities to the Customs’ 24-hour hotline 2545 6182.
Source: HKSAR Government
Customs swoops on illicit cigarette smuggling syndicates in Man Kam To and Lok Ma Chau
Hong Kong (HKSAR) – Hong Kong Customs yesterday (June 13) and today (June 14) swooped on two illicit cigarette smuggling syndicates in Man Kam To and Lok Ma Chau Control Points respectively. On board two cross-boundary lorries, a total of 240 boxes containing 1.75 million sticks of duty-not-paid cigarette were found. The total value is about $4.4 million with a duty potential of $3 million. In the operations, five men aged 28 to 45 were arrested and three lorries used in smuggling and distribution of illicit cigarettes were seized.
At about 9.20pm yesterday, Customs officers at Man Kam To Control Point intercepted a vehicle loaded with goods which declared to contain “fresh fruit”.
Upon x-ray examination, 450,000 sticks of duty-not-paid cigarettes were found concealed inside 106 cartons of fresh fruit. The driver was arrested immediately.
At about 9am today, Customs officers at Lok Ma Chau Control Point intercepted a logistics lorry. Upon X-ray examination, 1.3 million sticks of duty-not-paid cigarettes were found while the driver and three more men were arrested.
In the above cases, cigarettes of various brands, which had been sorted and packed, could be speedily delivered for sale. Customs believes that the illicit cigarette syndicates continues to manipulate the “swift distribution” mode with an attempt to lessen the risk of being detected.
Under the Dutiable Commodities Ordinance, anyone involved in dealing with, possession, selling and buying illicit cigarettes commits an offence. The maximum penalty on conviction is imprisonment for two years and a fine of $1 million.
Customs will continue to take stringent enforcement against cigarette smuggling activities to protect government revenue.
Members of the public are urged to report any suspected illicit cigarette activities to the Customs’ 24-hour hotline 2545 6182.
Source: HKSAR Government
Worldwide organized cigarette smuggling: an empirical analysis
http://www.tandfonline.com/doi/abs/10.1080/00036840701720721
Applied Economics
Abstract
This article estimates the economic size and the impact on government revenues of cigarette smuggling worldwide and formulates economic policies that can be used to effectively address the problem. First, information from various sources are combined and a global map of smuggling routes for cigarettes is described. By examining the international cigarette trade records, the hub/transit countries in six regions of the world are identified. Second, a variable that measures smuggling incentives for cigarettes is defined and computed for 110 countries. Third, a static global demand model for cigarettes (that includes the smuggling incentives variable) is specified and robustly estimated. Using the estimation results, global price and income elasticities of cigarette demand are obtained as −0.41 and 0.37, respectively. It is estimated that in 1999, 3.4% of global cigarette consumption was smuggled and 7.4% of tax revenue was lost to smuggling. Fourth, the best policy options are identified to achieve the objectives of both public health agencies (less consumption, less smuggling) and governments (less smuggling, more revenue). A tax-induced increase in real retail cigarette prices and an improvement in anti-smuggling law enforcement (as proxied by the corruption indicator) are found to significantly increase government revenues while decreasing global consumption and smuggling. Furthermore, when the tax increase is not accompanied by an improvement in law enforcement, then global smuggling of cigarettes would increase, but governments would still enjoy increased tax revenues.
Smuggling
Pine cigarettes: Korean firm urged to curb smuggling into Pakistan
Business Recorder (blog) – 1 hour ago
The KT&G, the nation’s leading tobacco maker, exports to 45 countries, including four …Sources said tobacco maker was made aware of the smuggling when
Tobacco Kills: So what to do in Africa?
The scientific evidence is overwhelming. As Robert Beaglehole and colleagues at the World Health Organization (WHO) pointed out years ago, tobacco is the only consumer product that eventually kills half of its regular users if they follow its manufacturers’ recommendations.
http://blogs.worldbank.org/nasikiliza/tobacco-kills-so-what-to-do-in-africa
Given this dire reality, it is clear that Africa is now at a crossroads. On one hand, the countries in this region have become an attractive and under-tapped market as tougher regulations, high taxes, and greater consumer awareness of the dangers of smoking in developed countries are “closing the door” to tobacco imports and leading to significant drops in consumption. And on the other hand, cigarettes are becoming increasingly affordable as incomes rise in several African countries due to the rapid economic growth of recent years. Indeed, African countries are experiencing the highest increase in the rate of tobacco use amongst developing countries–the number of smokers in sub-Saharan Africa is projected to increase 148 percent by 2030, to 208 million smokers or one-fifth of the total population.
Should African governments and the international community be concerned with this development?
I firmly believe, yes. If the current smoking patterns continue unabated, they will accelerate the growth of tobacco-related non-communicable chronic diseases (e.g., lung cancer, respiratory problems, heart attacks) compounding the already heavy burden imposed by communicable diseases (e.g., HIV/AIDS, tuberculosis, malaria). Besides undermining the health of the population and their productive potential and contributing to lives lost, Africa will be confronted with major health system and funding challenges to deal with these chronic diseases. The magnitude of these challenges is best illustrated by the United States, where cigarette smoking is estimated to cause annually more than 400,000 deaths and about US$200 billion in health-related economic losses, nearly half in direct medical costs.
The good news is that Africa is fighting back. Some 42 African countries have already signed the 2003 WHO Framework Convention on Tobacco Control (FCTC) that binds them to a number of anti-tobacco measures, including high taxes on tobacco products and protecting people from exposure to tobacco smoke.
On June 3-5, 2012, the World Bank, in partnership with the Southern Africa Development Community (SADC), the Ministry of Finance of Botswana, the Bloomberg and Gates Foundations, and WHO, is convening in Gaborone, Botswana, a high level forum “The Economics of Tobacco Control: Taxation and Illicit Trade.” With the participation of delegations from Ministries of Finance, Trade, and Health of 14 SADC member countries and global and regional experts, the aim of the forum is to promote dialogue on best practices in effective design and administration of excise taxes on tobacco as an instrument to promote public health and to share knowledge on the dimensions, causes, and extent of illicit trade of tobacco and strategies to control it.
These topics are critical for helping create a “smoke-free” environment in Africa. Of all the demand-reduction strategies outlined in the FCTC, increasing the retail price of tobacco products through higher excise taxes to make tobacco products less affordable is the single most effective way to decrease consumption and encourage tobacco users to quit. And, contrary to tobacco industry claims, the forum will be geared to show that increased tobacco smuggling does not automatically follow tax increases if governments show committed and strengthened law enforcement to combat smuggling and counterfeiting.
Customs hunts 300 buyers of smuggled cigarettes
SCMP
| Clifford Lo May 12, 2012 |
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Customs officers are trying to trace more than 300 buyers who placed phone orders for contraband cigarettes, after a series of raids on illicit tobacco operations. Officers found three ledgers during the raids that were believed to contain the buyers’ telephone numbers and order details – but the entries were represented by nicknames and abbreviations. The task of cracking the codes and tracking down the buyers has fallen on a new customs task force that targets the sale of contraband cigarettes via phone orders. “Tobacco traffickers use abbreviations and set their own secret codes to store their customers’ information,” a senior customs officer said. “We need more time to carry out background checks to identify buyers, then we will apply for search warrants in court before raiding their homes and making arrests.” The ledgers were seized on three occasions during an operation codenamed Torpedo, which started in the middle of last month and netted illegal cigarettes worth a total of HK$6.4 million. On Thursday, four tobacco traffickers were arrested in Tsuen Wan and HK$900,000 of cigarettes seized. Customs said the contraband was used to fill phone orders. That followed a raid on an industrial building in Tsuen Wan on Tuesday where contraband cigarettes with a retail value of HK$5.5 million were stored. Two men were arrested. Customs hit the place hours after a cross-border truck from Shenzhen smuggled in a consignment hidden in the hollow centres of 10 piles of cartons, said Mark Lee Yuen-man, divisional commander of the anti-illicit-cigarette investigation unit. The Torpedo operation involved raids on 60 flats, with 22 buyers arrested and 11,000 illicit cigarettes seized. The authorities said they wanted “to send a message that both buyers and sellers of illicit cigarettes have criminal responsibility”. |
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Customs swoops on telephone-order illicit cigarette activities
Hong Kong (HKSAR) – Hong Kong Customs seized about 11,000 sticks of illicit cigarettes and arrested 22 persons suspected of buying illicit cigarettes by means of telephone order during a three-week special operation.
The Divisional Commander (Anti-Illicit-Cigarette Investigation) of the Revenue and General Investigation Bureau, Mr Lee Yuen-man, said today (May 8) at the press conference, “The operation was conducted between mid-April and early May targeting illicit cigarette buyers who were believed to have been buying illicit cigarettes by means of telephone order. As a result, illicit cigarettes were found in 22 residential premises. A total of 22 persons, including 21 men and a woman aged from 20 to 73, were arrested, and about 11,000 sticks of illicit cigarettes were seized.
They have been charged under the Dutiable Commodities Ordinance.”
Customs established a 15-officer Telephone Order Task Unit on April 1 this year to enhance intelligence analysis, investigation and enforcement actions against illicit cigarette activities, in particular peddling via telephone order. The operation was planned and carried out after analysing the intelligence collected from several illicit cigarette cases detected last month.
Mr Lee said, “In the first four months of this year, Customs detected nine significant smuggling cases and smashed over 76 illicit cigarette distribution centres, resulting in the seizure of a total of 18.7 million sticks of illicit cigarettes valued at $50 million. Customs found that most of the distribution centres had made use of telephone ordering to sell the illicit cigarettes and the offenders distributed promotion leaflets to the targeted customers in public housing estates.”
Customs will continue to closely monitor the situation and conduct stringent enforcement actions against illicit cigarette activities.
Under the Dutiable Commodities Ordinance, buying and selling illicit cigarettes are illegal.
The maximum penalty is a fine of $1 million and imprisonment for two years.
Members of the public are urged to report any suspect illicit cigarette activities to Customs’ hotline at 2545 6182.
Source: HKSAR Government
38m contraband cigarettes seized
Contraband cigarettes worth almost 15 million euro have been found in Dublin Port
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More than 38 million contraband cigarettes worth almost 15 million euro have been seized by Customs officials.
The haul – the largest in Europe so far this year – was discovered in four 40ft (12m) maritime containers imported into Dublin Port.
A premises was also searched after legal documentation linked the consignment with an Irish-based company. No arrests have been made.
Revenue Commissioner Liam Irwin said the seizure, which was the result of profiling by the Revenue’s Customs Service, was a significant blow to the criminals involved in the illicit trade.
“Tobacco smuggling is organised fraud on a global scale – it brings criminality into our communities and robs millions of euro from the State each year,” he said.
The Golden Eagiie brand cigarettes, which originated in Vietnam, arrived in Ireland via Rotterdam specifically for the black market. Revenue officials believe the haul had a potential loss to the Exchequer of 13.1 million euro.
A Customs spokeswoman said several individuals were interviewed and a premises was searched under warrant after it had been identified in the documentation.
“Documents seized as part of the investigation are currently being examined,” she said. “Investigations are ongoing nationally and internationally.”
Retailers Against Smuggling said the seizure highlights the scale of the smuggling problem.
Spokesman Benny Gilsenan said: “We have been calling on the Government for some time to introduce a minimum fine for cigarette smugglers. Our message is clear: it is time to get tough with these criminals and impose heavier fines.”