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June 9th, 2016:

Sanctions may squeeze North Korea’s counterfeit cigarette trade

Stepped-up U.N. sanctions against North Korea could put a crimp on an important source of foreign currency for the secretive communist state: illicit cigarettes.

Port officials in Manila and Malta have at least twice in the past three years seized shipments of North Korean cigarettes that camouflaged millions of high-quality counterfeit Marlboros with packaging and markings like those prepared for legal sale in Iraq.

Under a U.N. resolution adopted on March 2 in response to North Korea’s latest nuclear and rocket tests, member states are required to inspect all cargo headed to and from the country to check for contraband goods. Additionally, the U.S. on June 1 barred third-country banks from using accounts in the U.S. to process transactions for North Korean counterparts.

Sulafar Safir, commercial attache at the Iraqi embassy in Seoul, speculated that the seized shipments may have carried Iraqi markings to facilitate sale in neighboring states, such as Syria and Turkey.

The Malta shipment was addressed to a Libyan business identified as Al Shama Al Modea, whose name also surfaced in a 2014 Malta case involving counterfeit Winston cigarettes. Paperwork for the Manila shipment listed two Philippine addresses, Gervic Trading and Transocean Export Sales.

The Philippines is one of Asia’s top markets for counterfeit cigarettes, accounting for an estimated 709 million of the 1 billion counterfeit cigarettes consumed across 16 regional markets in 2014, according to a study released in January by the International Tax and Investment Center and Oxford Economics. The study was underwritten by Marlboro owner Philip Morris International; Japan Tobacco owns rights to the Winston brand outside the U.S.

A tobacco investigator familiar with both seizures said the Manila shipment was to be sent on to the United Arab Emirates port of Jebel Ali for transshipment by a Syrian businessman to his homeland.

While the political affiliations of the businessman are unclear, insurgent and terrorist groups in Syria, Algeria, Afghanistan and other Middle Eastern countries have turned to cigarette smuggling to generate revenue.

In a report last year, the Center for Analysis of Terrorism in Paris counted 15 terror groups who had turned to counterfeit and smuggled cigarettes for financing, including the Kurdistan Workers’ Party, or PKK, in Turkey. Volumes crossing over the border with Syria have doubled since that country’s civil war began in 2011, the report said.

“Cigarettes smuggled into Turkey have been used to fund terrorism,” said Louise Shelley, who directs the Terrorism, Transnational Crime and Corruption Center at George Mason University.

Khaled Abou al-Abbass, known as Mokhtar Belmokhtar and a leader of al-Qaida’s affiliate in northwest Africa, is also known to have relied on cigarette trafficking for funds. Michael Ellis, assistant director at Interpol’s counterfeiting and illicit goods trafficking unit, said, “The links between al-Qaida and cigarette smuggling led to [Belmokhtar’s] nickname of ‘Mr. Marlboro.'”

GOOD AS CASH North Korea emerged as a major producer of counterfeit cigarettes after China joined the World Trade Organization in late 2001 and began cracking down on such activity within its borders, according to a 2014 report by Sheena Greitens, a political science professor at the University of Missouri. Production simply shifted over the Korean border. Between 2002 and 2005, counterfeit Marlboros from North Korea were identified 1,300 times within the U.S., according to a State Department report issued in December.

Although North Korea last year banned the sale of foreign cigarettes at home, counterfeiting of foreign brands continues, according to interviews Greitens conducted with defectors.

“Cigarettes are an especially lucrative item to counterfeit compared to other consumer goods,” she said. “They are also comparatively less risky from an enforcement standpoint than a product like narcotics.”

“How [does North Korea] get hard currency to pay for necessary imports?” asked Daniel Pinkston, a lecturer on international relations at Troy University in Seoul. “With the sanctions regime and the inefficiencies and structural problems in the economy, those problems are not going away any time soon, so pressures to resort to illicit activities remain.”

Hard data on this is naturally difficult to come by. “We don’t know the volumes,” said the investigator involved in the recent seizures. “I think they go up and down, but we believe [the production] to be ongoing and increasing. We know from primary sources that what restricts their volumes is lack of machinery and lack of spare parts. They have a backlog of counterfeit orders. It is just a matter of getting the machinery to produce them.”

The South’s Korea Trade-Investment Promotion Agency has reported that the North imported $180,000 worth of Swiss tobacco manufacturing machinery in the first half of 2014, though the North also produces its own brands for local consumption. North Korean leader Kim Jong Un is a keen smoker, often photographed with a lit cigarette in hand. Legitimate cigarettes are one of the few manufactured items the country exports, mostly to or via China. Along the border, North Korean cigarettes are sometimes used in lieu of currency in small-scale transactions.

The seizures in Manila and Malta followed tipoffs to port authorities from the U.K. Customs and Excise agency and Interpol. The seized cargoes were inspected by U.S.

Homeland Security agents. In both cases, shipping containers with cartons of legitimate North Korean cigarettes concealed packs of pirated Marlboros. The Manila shipment, seized in October 2013, included 8.79 million counterfeit Marlboros in 439,000 packs; the shipment in Malta in June 2014 held 8.16 million sticks in 413,000 packs. A source put the street value of the two shipments at $4.2 million to $8.4 million. The counterfeits were hidden behind stacks of legitimate North Korean cigarettes.

According to shipping documents, the sender for both shipments was Sun Moon Star Trading, based in Dalian, a port in northeast China close to North Korea. But there is no sign of such a company at the address listed on the forms, and people working in the building said they had never heard of Sun Moon Star. Nor are there any signs of Gervic Trading or Transocean Export at their given Manila addresses.

The tobacco investigator said his informant told him the cigarettes came to Dalian from the North Korean port of Nampo. After leaving Dalian, the Manila shipment passed through Kaohsiung, Taiwan, according to shipping records; the Malta container transited through Busan, South Korea.

Philip Morris International is cagey about how it is handling these cases. “We don’t comment on action taken or intended with respect to specific cases,” a spokesman said.
The question now is whether U.N. member states will rigorously implement the inspections which would root out more shipments of counterfeits.

“I think they will make life more difficult for these kinds of operations, and at the moment it is high-energy and high-implementation, but the places most likely to implement cargo checks consistently, over the long term, are places that are least likely to be buyers,” said Christopher Green, a researcher at Leiden University in the Netherlands. “I can imagine that a majority of places in Africa and the Middle East will lose the institutional will or interest in conducting these checks over the long term.”

Said Troy’s Pinkston: “It is certainly going to influence or affect North Korean smuggling, but it is all about enforcement and compliance. Rigorous inspections are costly and a lot of places do not have these capacities, so who is going to pay for this?”

Nikkei staff writers Daisuke Harashima in Dalian and Cliff Venzon in Manila contributed to this report.

Doctors warn of e-cigarettes causing leg burns

INDIANAPOLIS, Ind. — Doctors at The Richard M. Fairbanks Burn Center at Eskenazi Health are sending out a warning to electronic cigarette users after an increase in patients with burns on their legs after leaving the devices in pants pockets.

In the last six months, doctors at Eskenazi Health have treated at least three patients with second and third degree burns. Doctors said all of the patients had an e-cigarette in their pocket, along with change.

Doctors believe the battery in the device is reacting with metal change, causing patients pants to catch on fire and leaving them with serious burns.

Some patients have spent more than six days in the hospital, recovering from the burns.

“They’ve had very significant injuries to their thighs requiring sometimes multiple stage surgery, but certainly skin grafting from those burns,” explained Dr. Rajiv Sood.

At Indy E Cigs, experts said there are many safety nets in place to ensure people don’t get burned, but it’s important for the user to follow those directions.

“You’re gonna smell it. You’re gonna hear it. You’re gonna feel it. It’s the user that ultimately needs to be aware of what’s going on,” said Indy E-Cig founder, Shadi Khoury. “We recommend that you try not to put them in your pocket, that would be the fix all here.”

Doctors at Eskenazi are so concerned about this issue, they’re publishing an article on the topic. It will likely be shared with hospitals across the country.

Tobacco Giant Wanted To Sue Australia Over Graphic Warning Labels

Buying cigarettes in Australia involves choosing among shelves of different graphically illustrated, awful illnesses, as that’s how cigarettes legally have to be packaged. Though in reality people can’t choose how smoking tobacco will affect them, the situation is closer to real life than a shelf of glorified smoking brands.

Tobacco giant Philip Morris tried to sue Australia over its packaging laws in 2012, but the Hague international court ruled the attempt an “abuse of rights” in December last year. The 186-page ruling was unsealed on Tuesday.

Australia was the first country to mandate that cigarettes be sold in plain packages, with no branding and full, visual, health warnings, in an attempt to reduce smoking rates, especially among youth. Other countries are now considering the initiative, and Britain is making it compulsory this month.

In Britain, the tobacco industry also tried to defeat the law, but the high court in London rejected the challenge this week. Health spokespeople lauded the rejection a “crushing defeat for the tobacco industry,” and Harpal Kumar, head of Cancer Research UK, said it was “the beginning of the end for packaging that masks a deadly and addictive product … it reflects a huge effort aimed at protecting children from tobacco marketing.”

Philip Morris, which manufactures brands such as Marlboro, argued that the rules impinge on their trademark and intellectual property. Not only did the company want Australia to withdraw the law, it wanted damages of at least US$4.2 billion plus compound interest from Australia — that is, the Australian people.

The company lodged its challenge using an old trade deal between Australia and Hong Kong that included foreign investments, by restructuring its company so that it would fall under the treaty. The court ruled, however, that the cigarette company had restructured itself just to gain protection under the deal, finding that an “abuse of rights.”

Tobacco companies also ran a strong media campaign around the legislation, arguing, rather weakly, that retail workers would find it hard to distinguish between the different brands when selling them, and that crime syndicates would benefit from the packaging. Imperial Tobacco claimed it made Australia a nanny state — that is, an overprotective government.

The trend of corporations suing countries has gained traction over the last decade, with Australia counting 42 investor-state dispute settlement provisions in international treaties in 2014. If the Trans-Pacific Partnership is ratified, transnational corporations based in the US will have an avenue to sue Australia. Though there’s an exclusion for tobacco control measures, there isn’t one for other health issues.

So what do cigarette packets in Australia look like now?

Under Australian legislation, cigarettes have to be sold in logo-free, dark-brown-olive packaging (one of the least attractive colours, according to government research, especially for young people). The number of cigarettes in each packet, as well as the brand, is indicated in plain, uniform text, and most of the packet consists of graphic health warnings, such as, “Smoking causes mouth and throat cancer” or, “Smoking harms unborn babies.”

Yet the impact of the packaging has been less than you might imagine, with one study finding that before it, 20 percent of smokers wanted to quit, and after, 27 percent wanted to quit. And according to the Australian Bureau of Statistics, sales profits were barely affected by the measure, though they did decline after Australia implemented an increased sales tax.

Tobacco interventions pay off

However, a new US study from the Center for Tobacco Control Research and Education found that when smokers quit, healthcare costs immediately plunged. It found that if 10 percent of US smokers gave up cigarettes, and the rest cut back by 10 percent, the US could shave $63 billion off medical costs.

The analysis makes the case for tobacco-control policies as “a very good form of health care and societal investment by governments.”

But smoking is still killing over 480,000 Americans a year, with thousands of young people taking up the habit every day.

Meanwhile, the US tobacco industry spends a million dollars every hour to promote its products, according to Tom Frieden, director of the US Centers for Disease Control and Prevention.

And the day before the Australia Hague ruling was released, the US Supreme Court refused to hear a challenge by Philip Morris to a $25-million Oregon jury verdict in favor of a man whose wife died after smoking the company’s low-tar cigarettes.

The wife, Michelle Schwarz, began smoking in 1964, and tried to quit without any luck, before switching in 1976 to Philip Morris’ Merit brand, which was advertised as “full flavor” but “low-tar.”

She died in 1999 from a brain tumor that was the result of metastatic lung cancer. The suit accused the company of negligence and fraud.

According to the European Commission and the World Health Organization, smokers lose an average of 14 years of life. Tobacco smoke contains more than 4,000 chemicals, 250 of which are harmful and 50 of which cause cancer.

A world without advertising on packaging?

So, what would happen if other unhealthy products were sold in a similar way? What if sweet cereals, for example, were sold with giant warnings that they were more harmful than a lot of junk food, and the only information on the package was… information. What if microwave popcorn packaging only contained the product name, ingredients, quantity, and a giant warning that some of the ingredients cause cancer? Or if Coca Cola and Pepsi were sold in plain cans with obesity and kidney malfunction warnings? We should ask ourselves if consumers, especially younger ones, have a right to shop without manipulation.

—Tamara Pearson

New anti-tobacco law expected soon

DOHA: The State Cabinet has taken steps to issue the much-anticipated anti-tobacco law that stipulates stricter punishment for smoking in closed public places.

The draft law has stipulated strict measures to curb the import and use of tobacco products and its derivatives and a ban on electronic cigarettes, “sweika” and other chewing tobacco.

The decision was taken by the Cabinet at its regular weekly session yesterday after noting the recommendation of the Advisory Council on the draft law.

The new law, once issued, will replace the existing anti-tobacco law (No. 20 of 2002).

The Cabinet endorsed its draft decision on establishing a standing committee to review the pricing of fuel in local markets.

The decision stipulates that the committee will be chaired by a representative of the Ministry of Energy and Industry and is to include representatives from authorities concerned as members.

The objective of the committee is to execute the government’s plan to liberalize fuel prices in the domestic markets, Qatar News Agency reported yesterday.

Prime Minister and Interior Minister H E Sheikh Abdullah bin Nasser bin Khalifa Al Thani chaired the session at the Emiri Diwan.

The session endorsed a draft Emiri decision on the organisational structure of the Foreign Ministry.

It agreed to the application of provisions of Law No. 24 of 2002 on the retirement and pension of Qatari employees of some entities.

The Peninsula

Cigarette smoking among U.S. high school students at an all-time low, but e-cigarette use a concern

Current cigarette smoking among U.S. school students lowest in 23 years.

Current cigarette smoking among U.S. school students lowest in 23 years.

Cigarette smoking among high school students dropped to the lowest levels since the National Youth Risk Behavior Survey (YRBS) began in 1991, but the use of electronic vapor products, including e-cigarettes, among students poses new challenges according to the 2015 survey results released today by the Centers for Disease Control and Prevention.

Although current cigarette use decreased significantly from 28 percent in 1991 to 11 percent in 2015, new data from the 2015 survey found that 24 percent of high school students reported using e-cigarettes during the past 30 days.

“Current cigarette smoking is at an all-time low, which is great news. However, it’s troubling to see that students are engaging in new risk behaviors, such as using e-cigarettes,” said CDC Director Tom Frieden, M.D., M.P.H. “We must continue to invest in programs that help reduce all forms of tobacco use, including e-cigarettes, among youth.”

In May 2016, the U.S. Food and Drug Administration finalized an important rule extending its authority to all tobacco products, including e-cigarettes. The rule includes, for the first time, a restriction on the sale of these products to minors nationwide.

A wealth of data on teen health-related behaviors

The YRBS provides important data related to student behaviors, such as behaviors that contribute to unintentional injuries and violence.

The 2015 survey findings indicated that youth continue to be at risk by using wireless devices while driving:

Among high school students who had driven a car or other vehicle during the past 30 days, the percentage of high school students who texted or e-mailed while driving ranged from 26 percent to 63 percent across 35 states and from 14 percent to 39 percent across 18 large urban school districts.
Nationwide, 42 percent of students who had driven a car or other vehicle during the past 30 days reported texting or e-mailing while driving. This percentage did not change from 2013.
The 2015 survey findings showed encouraging reductions in physical fighting among adolescents.

The percentage of high school students nationwide who had been in a physical fight at least once during the past 12 months decreased from 42 percent in 1991 to 23 percent in 2015.
However, nationwide, the percentage of students who had not gone to school because of safety concerns is still high.

Six percent of students missed at least 1 day of school during the past 30 days because they felt they would be unsafe at school or on their way to or from school. The percentage of students not going to school because of safety concerns decreased from 2013 (7 percent) to 2015 (6 percent).
The survey also included questions on prescription drug use.

Prescription drug use among youth decreased from 20 percent in 2009 to 17 percent in 2015. Nationwide, 17 percent of students had taken prescription drugs (e.g., Oxycontin, Percocet, Vicodin, codeine, Adderall, Ritalin, or Xanax) without a doctor’s prescription one or more times during their life.
The 2015 YRBS report also included data on youth sexual risk behaviors.

The percentage of high school students who are currently sexually active (had sexual intercourse during the past three months) has been decreasing since 1991, dropping from 38 percent in 1991 to 30 percent in 2015. Current sexual activity also decreased from 34 percent in 2013 to 30 percent in 2015.
Among high school students who are currently sexually active, condom use decreased from 63 percent in 2003 to 57 percent in 2015, following more than a decade of increases that peaked in the early 2000s. Condom use did not change from 2013 (59 percent) to 2015 (57 percent).
The proportion of currently sexually active students who had drunk alcohol or used drugs before last sexual intercourse decreased from 25 percent in 1999 to 21 percent in 2015, but did not change from 2013 (22 percent) to 2015 (21 percent).
Nationwide, 10 percent of all students had ever been tested for HIV. This is a decrease from 13 percent in 2011 and 2013.
Trends in dietary and sedentary-related behaviors, such as drinking sugar-sweetened beverages and screen time, have varied in recent years:

There was a significant decrease in drinking soda one or more times a day from 27 percent in 2013 to 20 percent in 2015.
From 2003-2015, the percentage of high school students playing video or computer games or using a computer three or more hours per day (for non-school related work) nearly doubled from 22 percent to 42 percent.
“Health risk behaviors among youth vary over time and across the nation, making the YRBS an important tool to better understand youth. The YRBS helps us identify newly emerging behaviors and monitor long-standing youth risk behaviors over time,” said Laura Kann, Ph.D., chief of CDC’s School-Based Surveillance Branch. “While overall trends for the 2015 report are positive, the results highlight the continued need for improvements in reducing risks among teens.”

About the Youth Risk Behavior Surveillance System (YRBSS)

CDC’s YRBSS is the only surveillance system designed to monitor a wide range of priority health risk behaviors among representative samples of high school students at the national, state, and local levels.

National, state, and large urban school district surveys are conducted every two years among high school students throughout the United States. These surveys monitor health risk behaviors including unintentional injuries and violence; sexual behaviors related to unintended pregnancy and sexually transmitted diseases, including HIV infection; tobacco, alcohol, and other drug use; unhealthy dietary behaviors; and physical inactivity. The surveys also monitor obesity and asthma.

More than 15,000 U.S. high school students participated in the 2015 National YRBS. Parental permission was obtained for students to participate in the survey, student participation was voluntary, and responses were anonymous. States and large urban school districts could modify the questionnaire to meet their needs. The 2015 YRBSS report includes National YRBS results and results from surveys conducted in 37 states and 19 large urban school districts.

The National YRBS is one of three HHS-sponsored surveys that provide data on substance abuse among youth nationally. The others are the National Survey on Drug Use and Health (NSDUH), sponsored by the Substance Abuse and Mental Health Services Administration – a primary source of statistics on substance use among Americans age 12 and older ( – and the Monitoring the Future (MTF) study funded by the National Institute on Drug Abuse/National Institutes of Health and conducted by the University of Michigan’s Institute for Social Research ( The MTF study tracks substance use and related attitudes among students in the 8th, 10th, and 12th grades.

The 2015 YRBS data are available at