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May 30th, 2015:

COSH calls for a ban on electronic cigarettes

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ITIC (International Tax and Investment Center) Raises Alarm to EU Policy Makers About Galloping Illicit Tobacco Trade

WASHINGTON, May 30, 2011 /PRNewswire/ —

– EU Member States Losing EUR10 Billion in Tax Revenues Each Year and Facing Uphill Battle to Reverse the Trend

At a meeting today on intellectual property, counterfeiting and piracy in Brussels, hosted by the European Parliament’s Kangaroo Group, the International Tax and Investment Center (ITIC) warned the European Union (EU) that it faces an uphill battle to stem the flow of illegal cigarettes pouring through its borders and across its Member States.

Illegal cigarettes account for approximately 9% of all cigarettes consumed across the EU, costing governments an estimated EUR10 billion in lost tax revenues each year. Certain countries like Ireland have registered levels of 1 in every 4 cigarettes coming from the black market. But the consequences of illicit trade reach far beyond government revenue loss. “Criminal gangs attracted by the huge profits are selling completely unregulated tobacco products to anybody who will buy them, including kids,” said Daniel Witt, President of ITIC.

Speaking about its recently launched booklet – The Illicit Trade in Tobacco Products and How to Tackle It – ITIC outlined the scope and drivers of illicit trade but also showed how customs, law enforcement, and tax and health officials around the world can address the growing problem.

ITIC pointed to numerous factors that are contributing to illicit trade, highlighting unbalanced fiscal policies, protectionist policy measures and weak enforcement. “It is fundamental that government policy aimed at reducing tobacco consumption assesses any potential impact on aggravating illicit trade,” noted Witt. Measures such as the introduction of standardized (plain) packaging for cigarettes, currently considered under the revision of the Tobacco Product Directive by the EU Commission, should be carefully looked at on the grounds that they could very well worsen the problem, making life easier for counterfeiters to flood EU markets with cheap fakes.

The ITIC publication, which also includes input from the World Customs Organization (WCO), will be widely circulated to policy makers and enforcement authorities around the world with the aim of triggering a much needed comprehensive approach to combating the issue.

Copies of the new booklet, The Illicit Trade in Tobacco Products and How to Tackle It can be obtained (at no cost) by writing Ms. Napolitano or directly from ITIC’s web site:

About the International Tax and Investment Center

The International Tax and Investment Center (ITIC) is an independent nonprofit research and education foundation with offices in Russia, Azerbaijan, Kazakhstan, Jordan, the Philippines, Ukraine, the United Kingdom and the United States. Organized in 1993, the ITIC serves as a clearinghouse for tax and investment policy information and as a leading knowledge center accessible by key policy makers in the former Soviet Union and other countries in the Middle East, North Africa, Southern Africa, and the Asia Pacific region.

More information on ITIC can be found on its website:

About the Kangaroo Group

The Kangaroo Group is an association of members of the European Parliament, Commission and Council and representatives of industry and academia working to enhance European unity step by step around the pursuit of common projects. The motto of the Kangaroo Group is free movement and security. The Group was set up in the European Parliament in 1979.

The Forum on Intellectual Property, Counterfeiting and Piracy, held in Brussels on May 26, was chaired by The Hon. Bill Newton Dunn, Member of the European Parliament. Other participants included The Hon. Edit Herczog, Member of the European Parliament, and Ms. Edit Horvath, Chief Policy Officer from the Hungarian Tax & Customs Authority representing the Hungarian EU Presidency.


Failed: Tobacco Industry Funded Research on Illicit Trade of Tobacco Products in Asia

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World No Tobacco Day 2015: Time to act against illicit tobacco

By Vera Luiza da Costa e Silva, Head of the Secretariat WHO Framework Convention on Tobacco Control

There was a time when smuggling was seen as a romantic industry, its ranks swelled by swashbuckling characters like the Spanish Bandoleros of the 1800s. Riding Andalusian stallions, clothed in long capes and wide-brimmed hats, they smuggled tobacco and still found the time to fight Napoleon’s invaders.

There’s nothing romantic about today’s illicit tobacco trade. A business of truly global proportions, it has a track record of filching funds from where they’re needed most. It’s no exaggeration to say that the world has insufficient hospital wards, nurses and doctors to face the increase in cancer sufferers, because criminals have diverted tax revenues into their own pockets.

It’s difficult to estimate the lost tax, but even a conservative 2009 estimate suggested that US$ 31 billion was missing from government coffers because of the illicit trade. Other reputable researchers say the number is even higher – perhaps as much as US$ 50 billion. The main victims are low- and middle-income countries that need the money most, and of course the consumers turned into addicts by more accessible and affordable tobacco products.

That’s why this year’s World No Tobacco Day on 31 May is devoted to the issue of the illicit trade. The World Health Organization and the Secretariat of the WHO Framework Convention on Tobacco Control (WHO FCTC) are urging Member States to join the expanding group of Parties that have signed the Protocol to Eliminate the Illicit Trade in Tobacco Products, an international treaty in its own right negotiated under the umbrella of the WHO FCTC.

Tobacco-related illness is one of the biggest public health threats the world has ever faced. Approximately one person dies from a tobacco-related disease every six seconds, equivalent to almost six million people a year. That is forecast to rise to more than eight million people a year by 2030, with more than 80% of these preventable deaths occurring among people living in low-and middle-income countries.

The Protocol will not only strengthen the hands of governments in combating this pernicious business. It will also increase tax revenue, improve the health of the world’s citizens and cut the financial lifeline of those who challenge law enforcers such as organised criminal gangs.

Criminal groups are not the only beneficiaries. Petty peddlers make a living where border controls are lax or local officials can be bribed to look the other way. Research shows that insurgent forces have also muscled into the trade in the Middle East and Africa. In central and eastern Africa for example, rebels accused of serious human right violations have been shown to use the illegal tobacco trade to finance their activities.

Yet it’s the tobacco industry that benefits most from the activities of bootleggers and smugglers. Illicit tobacco products come from factories too – and all too often the trail of evidence is traced back to legally sanctioned manufacturers.

There is a wealth of material to prove the point. Several large tobacco companies paid US$ 1.7 billion in fines to the Canadian authorities from 2008-10 after they were accused of smuggling conspiracy charges; Her Majesty’s Revenue and Customs in the UK told an inquiry that tobacco industry supplies to certain countries are “considerably higher than legitimate local demand.” And paperwork disclosed by the tobacco industry as a result of US court cases provided detailed evidence of manufacturers using illicit routes to expand sales and win new markets, for example in Asia and Latin America.

Given the forces ranged against it, how would the Protocol make a difference? Probably the biggest change would increase control over the supply chain. Tracking and tracing systems – with costs charged to the tobacco industry itself but controlled by governments – would show whether and where products have been diverted into the illicit system.

Imports, exports and manufacturing would be licensed, legal sanctions against smugglers and others engaged in the trade would be strengthened and international cooperation of the illicit trade, and action against it, would be enhanced.

The illicit trade is a many-headed entity, a hydra of illegal activity that harms the gullible and the vulnerable. It will take many years to defeat, but the battle must be waged if we are ever to make progress. The entering into force of the Protocol is the critical first step.

The Parliament of the Republic of Moldova approves new tobacco control law

In the context of World No Tobacco Day 2015, the Parliament of the Republic of Moldova voted today, 29 May 2015, to adopt a series of amendments to different laws directed to strengthen tobacco control. After lengthy debate in the Parliamentary Committee for Social Protection, Health and Family, led by Oxana Domenti, and strong opposition from the tobacco lobby and special interest groups, the new tobacco control law was approved.

For the past 2 years, the Republic of Moldova has made considerable progress in tobacco control, from elaborating and adopting a strong tobacco control law by the Government to securing Parliamentary approval today.

The new law closely follows implementation of the WHO Framework Convention on Tobacco Control and comprises a full ban on smoking in enclosed public spaces and the use of warning labels covering 65% of the front and back of cigarette packages. It also includes a full ban on the advertising and promotion of tobacco products, with the exception of philanthropy, which was replaced by regulations that prohibit advertisements using the trademark designation of tobacco products, the name of the tobacco industry entity and other strategies.

Each year in the Republic of Moldova, smoking causes 5600 deaths and a loss of more than 2000 workers from the national workforce. The Republic of Moldova has 690 000 adult smokers, and 90 000 of today’s youth population will take up smoking in the absence of strong tobacco control measures. Unless action is taken, up to half of all lifetime smokers – almost 390 000 Moldovans – will die early from diseases caused by smoking .

The new law will enforce implementation of these strong tobacco control strategies, lead to significant health improvements in the Moldovan population and provide the opportunity to save more than 40 000 lives each year.

Tobacco industry accused of fueling cigarette smuggling to boost profits

The industry stimulates the illegal market so that it can better argue against tax rises, campaigners claim

The tobacco industry has been accused of “appalling hypocrisy”, amid claims that it is fuelling the illicit trade in cigarette smuggling to bolster its arguments against tax increases and other anti-smoking measures.

In a report published to coincide with World No Tobacco Day, the pressure group ASH (Action on Smoking and Health) claimed that some tobacco companies are flooding foreign markets with more products than there is demand.

The report said that when some of this tobacco is subsequently smuggled back to the UK, it enables the companies to point to the dangers of a burgeoning contraband trade and to say that measures such as increasing tax would only serve to make legitimate cigarettes more expensive.

“They can argue that there is already a lot of smuggling, so you can’t increase duties further,” said Deborah Arnott, chief executive of ASH. “Our paper shows the appalling hypocrisy of the industry: they have been shouting about illicit trade, while remaining up to their necks in it themselves.”

The claims were denied last night, but the ASH report is likely to add to long-standing worries about the tactics of the tobacco industry, which often uses arguments about smuggling and counterfeiting to oppose higher duties and plain packaging.

Criticising an increase in tobacco duties in March’s Budget, for example, the Tobacco Manufacturers’ Association (TMA) said: “The illegal market is clearly growing as consumers seek cheaper products elsewhere. Plain packaging will be a gift to the criminal gangs who wish to flood the UK market with cheap, counterfeit tobacco.”

Suspicions about oversupplying foreign markets to stimulate a return trade in smuggling to the UK have been raised by organisations including HM Revenue and Customs (HMRC), which has reported that the 2011 supply of some brands of rolling tobacco to some countries exceeded legitimate demand by 240 per cent.

In November, British American Tobacco was fined £650,000 by HMRC for oversupplying cigarettes to Belgium, although the company insisted it was “providing a perfectly legal supply to a legitimate demand” and announced its intention to challenge the fine in court.

The ASH claims were backed by the report “Illegal Trade of Tobacco Products”, released last week by the World Health Organisation, which created World No Tobacco Day in 1987. The United Nations organisation claimed: “The tobacco industry covertly and overtly supports the illegal trade, from providing products to the market, to working to block tobacco control by trying to convince governments that measures like health warnings or tax increases will lead to more illicit trade.”

The ASH report also claimed that the tobacco industry regularly exaggerated the extent of smuggling and counterfeiting. It cited the Project Star report produced by the audit firm KPMG for the tobacco company Philip Morris International, which put the illicit cigarette trade at 16.4 per cent of the UK market in 2012 – higher than the HMRC estimate of 4 to 13 per cent.

Ms Arnott said that, despite tobacco companies’ claims of growing illegality, the HMRC mid-point estimates of the illicit trade’s UK market share have fallen from 21 per cent in 2000 to 10 per cent in 2013-14. “But,” she said, “that won’t stop the tobacco industry from routinely using the threat of illicit trade to try to block tobacco control measures.”

Rejecting ASH’s claims, Giles Roca, director general of the TMA, said: “The tobacco industry is firmly committed to tackling illegal trade. Anti-smoking lobby groups such as ASH fail to demonstrate any real understanding of the drivers of the illegal market, such as the UK’s very high tax policy, and instead focus on making unhelpful allegations.”

Citing HMRC figures showing that the “tax gap” caused by the illicit tobacco trade had increased to £2.1bn in 2013-14 from £1.6bn in 2011-12, he said: “The Government’s own data shows that the illegal trade is rising.” KPMG last night stood by the findings of its 2013 Project Star report.

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Smuggling of tobacco persists despite efforts: WHO

The World Health Organisation (WHO) on Friday said the smuggling of tobacco in southeast Asia was thriving despite stringent laws enacted by countries to control tobacco consumption.

WHO’s southeast Asia director Poonam Khetrapal said: “In the southeast Asia region, many countries have porous borders that provide easy opportunity for the smuggling of tobacco products.”

“All southeast Asian countries have enacted stringent laws to control tobacco consumption – both on pricing and sale of tobacco products in-country as well as against import of foreign brands – and despite these efforts, there is still a thriving trade in smuggled tobacco products,” Khetrapal said in a statement.

Her comments came two days ahead of the ‘World No Tobacco Day’ that falls on May 31.

Noting that the WHO Framework Convention on Tobacco Control was adopted by many countries in November 2012, Khetrapal urged all the member states to speed up their process of ratifying or acceding to the protocol.

She said there was a need to make a consolidated effort to put a break on these illegal transactions.

According to the WHO, tobacco kills nearly 6 million people each year globally and is likely to kill over 8 million people every year by 2030 if the situation is not brought under control.

It also said more than 80 percent of these preventable deaths would occur in low and middle income countries.

“Countries are constantly defining ways to curb tobacco consumption. Tax and price policies are widely recognised as most effective for reducing demand for and consumption of tobacco products. These measures together with strong pictorial warnings have brought substantial health care gains,” she said.

However, illicit trade undermines tobacco control efforts and facilitates increased intake of tobacco by youth and adults from low income groups by making tobacco products more affordable and accessible.

“Until products are not subject to legal restrictions and effective health regulations aimed at curbing tobacco use, such as pictorial warnings or banning sales to minors, this is fuelling the tobacco epidemic,” Khetrapal added.