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March 6th, 2009:

‘Phone-Up Cigarettes’ A Problem For Officers

Customs admits trade is hard to prosecute

Clifford Lo – Mar 06, 2009 – SCMP

A senior customs official admitted yesterday there were difficulties in cracking down on phone orders for illicit cigarettes, while announcing the arrest of 54 people and seizure of HK$7.5 million worth of illegal cigarettes in a week-long operation.

The arrests included tobacco traffickers and buyers, but none were involved in phone orders, said Chow Chi-kwong, head of the Customs and Excise Department’s revenue and general investigation bureau.

“To evade our detection, illegal traders only take orders from regular customers, or buyers are required to say a password. It is one of the obstacles we are facing,” he said.

Customs had carried out successful operations against such phone-order services in the past but it was time-consuming. He said the department was determined to deal with such tactics and would spare no effort to crack down on the trade of illicit cigarettes.

Tobacco traffickers hand out fliers across the city listing brands, a price list and contact numbers before delivering the illegal goods to buyers.

After the 50 per cent rise in tobacco duty announced in the budget, the average price of a pack of 20 cigarettes rose from HK$29 to HK$39.

Mr Chow said some tobacco traffickers also pushed up the price of illicit cigarettes by HK$10 to HK$20 for a package of 10 packs.

“Counterfeits sell for HK$60 to HK$90 a package and smuggled genuine cigarettes cost HK$120 to HK$160 a package,” he said.

The illegal trade is focused on Mong Kok, Yau Ma Tei, Sham Shui Po and Wan Chai.

Bracing itself for a possible rise in illicit activities after the increase in tobacco tax, customs stepped up enforcement to deal with the problem in a week-long operation that started on February 26. Officers made 46 arrests, including 26 buyers, in 40 cases and seized HK$130,000 worth of cigarettes. They found four storage areas for illegal cigarettes, where four people were arrested, and HK$900,000 worth of cigarettes.

To stop smuggling from the mainland, officers stepped up inspections at control points. They arrested five drivers, seized HK$6.5 million of illicit cigarettes and impounded three trucks and two cars at the Lok Ma Chau and Man Kam To checkpoints.

On Sunday, a 52-year-old man was arrested with 3,800 illicit cigarettes in his handbag and rucksack at the Lok Ma Chau border checkpoint as he returned from Shenzhen.

“We will not give criminals a chance to take advantage of the rise in tobacco duty to increase the trade of illegal cigarettes,” Mr Chow said.

While saying there was no sign of a rising trend in the trade of illegal cigarettes, he said customs would monitor events, enhance intelligence collection and step up enforcement.

The maximum penalty for trading in illicit cigarettes is a HK$1 million fine and two-year imprisonment. Mr Chow urged people to report such activity on customs’ 24-hour hotline, 2545 6182.

Customs dealt with 1,570 cases of illegal cigarette smuggling, distribution, sales and storage last year, 14 per cent fewer than in 2007.

Evidence Backs Tobacco Curbs

Mar 06, 2009 – SCMP

Chris Robinson’s letter could have been written by the public relations department of the tobacco industry (“Punitive antics just put smokers on the defensive”, March 2).

I must take issue with his claim that none of the efforts to curb smoking, including increased taxes, have worked.

In North America, Australia and Europe, cigarette smoking has declined drastically in the last few years which is why the tobacco industry now targets, with multibillion dollar marketing and advertising budgets, the undeveloped world, especially countries such as India, China and nations in Africa.

Perhaps tobacco taxes should increase 10-fold every year. That way the income generated would pay for the billions of dollars it costs the world’s taxpayers for the medical bills of all those smokers who suffer illness.

Peter Dann, Sai Kung

Smugglers Beware

Message from Clear The Air:

Tobacco smuggling is currently punishable under the Dutiable Commodities Ordinance with a fine of $1,000,000 and 2 years’ imprisonment, and under the Import and Export Ordinance with a fine of $2,000,000 and 7 years’ imprisonment. If counterfeit cigarettes are involved, the offender is also liable to a fine of $500,000 and 5 years’ imprisonment under the Trade Descriptions Ordinance. Enhanced sentence and confiscation of crime proceeds, under the Organized and Serious Crimes Ordinance are applicable if the offences are classified by the court as an organized crime.