Clear The Air News Tobacco Blog Rotating Header Image

March, 2017:

Organised crime syndicates smuggling ‘low risk’ tobacco leaf and cigarettes into Australia

ORGANISED crime syndicates trafficking drugs like ice and cocaine are now smuggling tobacco leaf and cigarettes and funnelling the cash back to terrorist groups.

http://www.geelongadvertiser.com.au/news/national/organised-crime-syndicates-smuggling-low-risk-tobacco-leaf-and-cigarettes-into-australia/news-story/81507f303ce6c7005b0f764afc10fe9b?nk=4a17044c8404afede5aa34fab4c90734-1490219416

With government taxes on tobacco set to rise again in May’s federal Budget, black market tobacco leaf and cigarettes are now as profitable as narcotics.

And such is the “low risk high return” market, Federal law enforcement now have credible evidence monies from tobacco trafficking are supporting terrorist groups in the Middle East.

Lead national crime fighting agency Australian Border Force intelligence has flagged a noticeable shift in the pattern of trafficking of tobacco which is rising exponentially, in ordinary postal mail alone by 10 to 15 per cent every year.

According to figures obtained by News Corp Australia, in January last year 3.6 million sticks of cigarettes and 435kg of loose leaf tobacco was intercepted at the nation’s main foreign parcel receiving facility in Sydney through which 75 per cent of all mail nationally passes through.

But this January, the latest monthly figure available, 5 million sticks and more than 1 tonne of loose leaf was intercepted.

Last year’s record average was 150 tonnes of loose leaf and 40 million sticks seized but this year that’s expected to be significantly eclipsed.

The difference has been the emergence of serious organised crime groups as opposed to opportunists taking over the trade almost in entirety.

“It’s all about the money,” one frontline ABF officer involved in the fight said.

“Those who were sending drugs are now involved, because the profit is there. We will recognise the mail coming through as being from the same criminal syndicate … over the last 12 months with tobacco we are actually seeing the exporters using the methodologies we would normally see with drugs.”

Such is the profit margin, ABF recently seized a teddy bear with just four packets of cigarettes sewn into it, a considerable effort for just $60 profit but in multiple individual teddy parcels it could be considerable.

Most of the illicit cigarettes, some of which ends up on the shelves of legitimate corner shops, is from South Korea, Japan, China and Hong Kong while loose leaf is mostly from Indonesia and the Middle East.

Some of it is manufactured legally but with the intention to import it specifically to Australia (evidenced in their plain packaging) to avoid duties or to fuel the black market with foreign markings and brands.

While the trafficking alone is a concern so to are its national security implications.

It has been learnt Australia’s multiagency counter terrorism agents, including the ABF, Australian Federal Police and ASIO, have been warned by overseas counterparts notably both US and French authorities and Interpol that the tobacco smuggling industry was being taken over by terrorist networks.

Specifically suspects linked to Lashkar-e-Taiba and the Taliban in Pakistan, Hezbollah in Lebanon and elements linked with al-Qaeda in the Islamic Maghred (AQIM) in North Africa, Islamic State (ISIS) and even Colombian militant group FARC who traditionally have been involved almost exclusively just in cocaine production.

Australian authorities have intelligence of targets here believed to be in the tobacco smuggling trade and sympathetic and or indirectly linked to the Islamic extremist cause of both Hezbollah and ISIS.

Authorities have conceded the thresholds that have to be established for a prosecution with proof of knowledge and proof of origin are substantial and hard to make, not helped by suspected corrupt import brokers and freight handlers.

Earlier this month, the Australian Criminal Intelligence Commission (ACIC) told a parliamentary joint committee inquiry into illicit tobacco it was a “low risk high reward” trafficking industry and as such high-end criminals were using profits to fund into other criminal enterprises.

This included those with jihadist terror links, although sensitivities around element prompted a request for the evidence to be heard behind closed doors.

There was evidence just one successful import out of 20 attempts from the Middle East was all that was needed to turn a profit.

In 2015, the ABF recognised the rise in tobacco smuggling and the potential loss to government in tax revenue and created a dedicated strike team.

The level of illegal trafficking attempts is expected to rise significantly with a 12.5 per cent increase in excise and customs duties to come in this September under the Federal Government’s May budget, to make the average cost of a packet of cigarettes the most expensive in the world at up to $40 a packet.

Calls to stub out tobacco deals

http://www.thestandard.com.hk/section-news.php?id=180992

Several legislators yesterday called on the government not to extend further concessions to the tobacco trade that is trying to further delay implementation of bigger graphic health warnings on cigarettes to the detriment of public health.

The government proposed in May 2015 to enlarge the size of health warnings to cover at least 85 percent of the packet or retail containers of cigarettes, saying the existing six graphic health warnings which cover half of packets or containers have been in use since 2007.

The Food and Health Bureau has made four concessions to meet the industry’s concerns, including using any background color to show nicotine and tar content and for the English version of the health warning to remain at 50 percent of the surface area of the lid of a drum-shaped container.

Undersecretary for Food and Health Sophia Chan Siu-chee told a Legislative Council health services panel yesterday that the government will also extend the adaptation period from six months to 12 months upon gazetting of the amendment order of the smoking ordinance.

Tourism-sector lawmaker Yiu Si- wing said: “The government is conceding, giving in to the tobacco sector’s pressure.”

The Labour Party’s Fernando Cheung Chiu-hung: “Public health should come first. Especially as I have had some personal health problems, I understand the value of health.

“I understand from the grassroots that smoking is a relief for them from stress but the government should not concede anymore. It has already conceded enough.”

Peter Shiu Ka-fai, of the wholesale and retail sector, questioned whether the government would have evidence to show that bigger warnings would mean “people will stop smoking?”

Wong Ting-kwong, of the import and export sector, said he is a smoker and that bigger warnings will still affect second- and third-hand smokers as “the smoke isn’t less.”

The panel also discussed the Hong Kong Code, a voluntary code aimed at protecting breastfeeding and to impose restrictions on formula milk marketing practices that give misconceptions about the nutritional value of products for children up to 36 months old.

Chan told the legislators: “We consulted the Department of Justice and the code is not breaching the competition law as this is voluntary.”

AMP snuffs out tobacco investment

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11821645

AMP Capital is to snuff out its investment in tobacco manufacturing companies including millions of dollars invested through its KiwiSaver funds.

The move is part of a decision to pull out of tobacco investments worth A$440 million across its global investment portfolio.

The asset manager will also pull its Australian investments out of cluster munitions, landmines, biological and chemical weapons companies.

The move follows on from its New Zealand arm which pulled out of these investments last year following reports by the New Zealand Herald and Radio New Zealand which highlighted KiwiSaver’s exposure to the controversial sectors.

AMP Capital chief executive Adam Tindall said it had excluded tobacco manufacturers under a new environmental, social and governance and socially responsible framework because their products were highly addictive, could not be consumed safely and impacted non users via second-hand smoke.

He said cluster munitions, landmines, biological and chemical weapons manufacturers were excluded because their products indiscriminately kill through normal use (including during peace time) and their use leaves a legacy of significant and specific danger for civilians.

“We are not prepared to deliver investment returns to customers at any cost to society.

This position has been affirmed through consultation with major institutional clients and engagement with retail customers.”

Divestment from the tobacco investments would occur progressively over 2017 the company said, with impacted investors notified prior to any changes being made.

“The managers of impacted portfolios will be instructed to progressively sell down their holdings of excluded securities in a reasonable manner. This may take up to 12 months from time of formal notification,” a spokeswoman said.

Last year the Herald identified AMP Capital’s KiwiSaver funds had $17,169,091 invested in tobacco companies in the year to March 31, 2015.

It also has investment funds outside of KiwiSaver which are likely to include tobacco investments.

The AMP spokeswoman said it was not giving a regional breakdown for its tobacco investment.

Recent Gains on Global Tobacco Taxation

http://blogs.worldbank.org/health/recent-gains-global-tobacco-taxation

The landmark Surgeon General’s Report on Smoking and Health, issued by U.S. Surgeon General Dr. Luther Terry in 1964, represented the first time that a government report linked smoking and ill health, including lung cancer and heart disease. The scientific evidence accumulated over the past five decades has helped us understand how tobacco use imposes a heavy health and economic burden across countries.

Action to curb tobacco use makes solid economic sense, given the high costs of tobacco-related illnesses and premature death and disability among adults in their most productive years. Smoking harms health, incomes, earning potential, and labor productivity. Smoking also undermines human capital development —a critical factor for inclusive economic and social development.

Raising tobacco taxation commensurate with affordability levels is proven to be the most effective measure to curve consumption. Tax increases are most effective in countries where the social acceptability of smoking is reduced by curtailing smoking in public places and educating the population about its negative health impact.

Contrary to the assumption that tobacco taxes are regressive, the results of recent studies done in Chile and the United States show that the benefits of this policy measured in terms of lower medical expenses and an increase in working years outweighs any relative increase in tobacco prices, largely benefitting the poor more than the rich.

Over the past decade, the World Bank Group (WBG), in partnership with the Bill & Melinda Gates Foundation and the Bloomberg Foundation, and in coordination other organizations, such as WHO, has expanded its tobacco taxation work globally to assist countries implement their public health and domestic resource mobilization efforts. Simultaneously, technical assistance is being provided to strengthen countries’ legal and regulatory capacity to control illicit tobacco trade. Support is also being provided to facilitate knowledge-sharing, building upon existing platforms such as the Joint Learning Network (JLN).

The experience of Philippines over 2012-2016 is one of the most compelling examples of ambitious national tobacco tax reform. It involved a fundamental restructuring of the country’s tobacco excise tax structure, including reduction in the number of tax tiers; indexation of tax rates to inflation; and substantial tax increases which expanded the fiscal space to fund the increase in the number of families enrolled in the health insurance scheme from 5.2 million primary members in 2012 to 15.3 million in 2015.

More recently, national governments in several countries have adopted significant tobacco tax reforms to improve public health and mobilize domestic resources, covering a total population of 200 million people. In the Ukraine, the 2017 budget includes a 40% excise tax increase on tobacco products, above the 2016 level, while maintaining a 12% ad valorem tax. It is estimated that that this measure will increase on average the excise tax burden as a share of the retail price of a pack of cigarettes from 41% in 2016 to 46% in 2017, while consumption is expected to decrease by 10%. To get a sense of the magnitude of health gains likely to result from the adoption of these tax increases, modeling work estimated that, by 2035, Ukraine’s recent tobacco tax increases will prevent 126,730 new cases of smoking-related disease; 29,172 premature deaths; and 267,098 potential years of life lost, relative to no change in tax. These reductions in disease and death are estimated to result in significant healthcare costs avoided.

As part of broad fiscal reforms approved by Colombia’s Congress, new taxes on tobacco products will nearly triple prices over 2017-2018, with annual adjustments for inflation and a mandated specific increase in subsequent years. Likewise, in Moldova, the average excise tax burden on a pack of cigarettes will increase from 39% in 2016 to 45% in 2017.

Following the introduction of the new tax regime in 2017, Armenia’s tobacco excise tax burden will double, increasing to 62% of the average retail price by 2020. In the case of Armenia and Colombia, tobacco taxation increases are part of larger tax system reforms that were included under fiscal consolidation programs.

In moving forward this agenda, we have to be clear that to be effective and sustainable, the design of tobacco tax reforms has to be grounded on a good understanding of how public policy is created and implemented in a country, including the social forces which could support or hinder the passage of strong anti-tobacco measures. We also have to be mindful that the adoption of tobacco tax reforms could be greatly facilitated if they are included as part of broad fiscal consolidation programs as shown by the recent experience in Armenia and Colombia, or as part of the formulation of annual government budgets as shown by the experience in Moldova and Ukraine.

Jokowi opts to kill tobacco bill

In an about face move that demonstrated stronger support for the country’s public health, the government said on Wednesday that it refused to deliberate the controversial tobacco bill, which seeks to boost cigarette production while dismissing the dangers of smoking.

This is the second time the government has rejected such a proposal from the House of Representatives after the bill was also voided last year following opposition from the Health Ministry to jointly deliberating the bill.

Ending his ambivalence on tobacco, President Joko “Jokowi” Widodo, whose administration had earlier issued a road map for the industry that sought to triple cigarette production to 524 billion by 2020, made a bold move that puts him against one of the country’s oldest industries and which employs millions of workers.

Cabinet Secretary Pramono Anung said Jokowi would not issue a presidential letter (Surpres) to approve the House proposal to start discussion of the bill.

Without the letter, the House cannot begin deliberations because all bills must be both discussed by representatives of the government and the House. If the House does not receive a letter from the government by the given deadline of March 19, the bill will be voided.

“There is no Surpres [to be issued by the President in this case],” Pramono told reporters at the State Palace, adding that the President had instructed Trade Minister Enggartiasto Lukita and State Secretary Pratikno to pay a visit to the House to deliver the government’s stance.

During a Cabinet meeting on Tuesday, Health Minister Nila Moeloek, Manpower Minister Hanif Dhakiri and Industry Minister Airlangga Hartarto told Jokowi that if the bill was passed into law then it would contravene a number of prevailing laws handled by the three ministries.

The Health Ministry has long campaigned for stronger tobacco control, which is crucial to saving around 200,000 Indonesians who die every year from tobacco-related illnesses and to save Rp 378 trillion (US$28.35 billion) in economic losses caused by smoking.

In his opening remarks during Tuesday’s Cabinet meeting, Jokowi, however, expressed doubts on the matter, saying that he could understand the concerns raised by the Health Ministry because the government had to take care of the health of its people, but the welfare of those who worked in tobacco industry should also be taken into consideration.

The bill was initially dropped from the 2016 National Legislation Program (Prolegnas) by the Health Ministry, which was appointed by Jokowi to lead the discussion at the House.

However, the comeback of Golkar Party politician Setya Novanto as House speaker paved the way for the inclusion of the bill in the 2017 Prolegnas.

Separately, the House Legislation Body (Baleg), which is assigned to deliberate the bill, has reminded the government to be cooperative, arguing that the bill will protect the domestic tobacco industry, while at the same time benefiting local tobacco farmers.

“If the government refuses to discuss the bill, which is the initiative of the House, we will also refuse to deliberate any bills initiated by the government in the future,” Baleg deputy speaker Firman Subagyo of Golkar said on Wednesday.

The politician suspected foreign intervention in pushing the government to kill the bill, as the draft restricted foreign tobacco companies operating in the country.

Firman said the majority of political factions at the House shared the same opinion and thus agreed to continue the deliberation.

Health groups ask FDA to ban candy-flavoured e-liquids

Candy- and fruit-flavoured tobacco products including e-cigarettes and cigars are luring youth into nicotine addiction, according to a report sponsored by leading health organisations that asks they be banned.

http://www.tobaccojournal.com/Health_groups_ask_FDA_to_ban_candy-flavoured_e-liquids.54145.0.html

Food and Drug Administration (FDA) authorities should ban all flavoured tobacco products, says the report issued by the Campaign for Tobacco-Free Kids, American Academy of Pediatrics, American Cancer Society Cancer Action Network, American Heart Association and American Lung Association.

“Gummy bear, cotton candy, peanut butter cup, cookies ‘n cream and pop rocks for e-cigarettes and chocolate, wild berry, watermelon, lemonade and cherry dynamite for cigars,” are some of the flavours targeted in the report.

Indonesia tobacco bill would fire up output despite health fears

Indonesia’s parliament has proposed a draft law that could lead to a sharp increase in tobacco output in a country that is already a top producer with one of the heaviest rates of smoking in the world.

http://uk.reuters.com/article/uk-indonesia-tobacco-idUKKBN16M1FK

Indonesia’s tobacco industry employs millions of workers and contributes almost 10 percent to government revenues through taxes, but has faced a backlash from the health ministry and anti-smoking organizations.

Health Minister Nila Moeloek said her ministry “definitely” opposes the tobacco bill as it has the responsibility to “safeguard the health of the people”.

The bill, which covers production, distribution and excise taxes, has to be approved by President Joko Widodo.

Indonesia’s industry minister, Airlangga Hartarto, said the government has to assess how the tobacco bill would affect existing regulations for the industry.

Firman Subagyo, the parliament member who initiated the bill, played down health concerns, saying tobacco is a “strategic” commodity that can increase the prosperity of Indonesian farmers and state revenues.

“Health should not be used as an excuse to destroy people’s livelihood,” Subagyo, who comes from Indonesia’s second-biggest political party, Golkar, said in an interview on Wednesday.

Under the draft law, manufacturers of tobacco products have to use locally sourced tobacco for at least 80 percent of their production, while imports of ready-to-use cigarettes may be subject to an excise tax of 200 percent.

‘RATIONAL PRICING’

Abdus Setiawan, a board member at the Indonesia Tobacco Growers’ Association, said he welcomed the draft law as it could help to protect farmers. But an increase in production should be balanced with “rational pricing”, he said.

Indonesia was the world’s fourth-biggest cigarette producer with an output of 269.2 billion sticks in 2015, according to the latest data from research firm Euromonitor International. The market was valued at 231.3 trillion rupiah (£14.20 billion).

Nearly two-thirds of men are smokers in Indonesia, where an average pack of cigarettes costs less than $2.

Major cigarette companies operating in the country include Phillip Morris-controlled PT Hanjaya Mandala Sampoerna Tbk, Djarum Group and PT Gudang Garam Tbk.

Sampoerna, through its tobacco suppliers, has partnered with about 27,000 tobacco farmers in Indonesia and gets almost three-quarters of its tobacco domestically, said Elvira Lianita, Sampoerna’s head of fiscal affairs and communications.

However, the industry’s total tobacco requirements have outpaced the domestic growth in tobacco output, Lianita said. Restricting access to raw materials through import regulations or taxes would disrupt the “overall economic stability”, she said.

“Partnership programs, not risky restrictions, would be the solution to bridging this gap and increasing farmer prosperity,” she added.

Gudang Garam and Djarum declined to comment.

(Reporting by Eveline Danubrata and Agustinus Beo Da Costa; Additional reporting by Cindy Silviana and Jakarta Newsroom; Editing by Ed Davies and Bill Tarrant)

Workers urged to ask smokers to stop smoking in their homes during visits as part of East Cambs District Council’s new anti-smoking policy

Tough new anti smoking rules within East Cambridgeshire Council – including a ban on electronic cigarettes and making workers get their manager’s permission for a smoking break- are ready to be implemented.

http://www.elystandard.co.uk/news/workers_urged_to_ask_smokers_to_stop_smoking_in_their_homes_during_visits_as_part_of_east_cambs_district_council_s_new_anti_smoking_policy_1_4932524

With two people a week in the district dying from smoking related diseases, the council is determined it will lead by example with its compulsory ‘smoking at work’ policy.

Spencer Clark, open spaces and facilities manager, will tell the regulatory and support services committee the refreshed policy supports the council’s duty of care.

“This smoking policy will apply to all staff, elected members, visitors, contractors and others who enter any premises or vehicles used as workplaces by the council,” he says.

“The legislation applies to all council enclosed buildings, related areas and council owned vehicles”.

Mr Clark said the smoke free workplace policy is to “guarantee a healthy working environment” and protect the current and future health of staff members and the public.

Any council employee found breaching the new guidelines will face disciplinary action.

It also asks employees who visit smokers in their homes as part of their duties to ask them to consider refraining from smoking. Managers may also be asked to complete risk assessments before visits to protect employees from exposure to second-hand smoke.

Smoking in workers’ private vehicles is also strongly discouraged and those workers who do smoke must do so off-site and must get their line manager’s permission,

All visitors, contractors and deliverers must also abide by the new policy.

All premises owned and occupied by the council – including staff car parks – will be covered by the smoking ban. Those buildings owned by the council – such as E-Space North and South – which have multi tenanted offices will also be brought into the non smoking in the grounds policy.

The policy is in line with the council’s aim to reduce the number of smoke-related deaths in the district and “guarantee the right of everyone to breathe in air free of tobacco smoke.”

Statistics from Public Health England have revealed that there were 97 smoke-related deaths in East Cambridgeshire in 2016.

* Portley Hill depot, Littleport, is the only council owned property that will be allowed to retain a designated smoking area.

Fewer Scots are choosing to smoke – but the costs of the habit remain high

National No Smoking Day passed last week with the now routine announcements from health chiefs welcoming the fact that fewer adults are choosing to light up.

http://www.scotsman.com/news/health/fewer-scots-are-choosing-to-smoke-but-the-costs-of-the-habit-remain-high-1-4392433

But the costs of the habit remain high and ensure that neither the Westminster or Holyrood governments will be declaring victory in their battle to stub it out.

Smoking remains the primary ­preventable cause of ill-health, disability and premature death in Scotland.

Each year tobacco use is associated with around 128,000 hospital admissions and more than 10,000 smoking-attributable deaths north of the border.

The average smoker in Scotland spends £1,500 each year on tobacco – and significantly more people in our poorest communities spend at this level compared to our most affluent.

Prevalence rates in Scotland have fallen from around 28 per cent in 2003 to just under 21 per cent in 2015. Among 13-year-olds and 15-year-olds, smoking rates have fallen steadily to their lowest ever levels – two per cent and seven per cent respectively.

“We’ve had ten years of decisive action which has undoubtedly improved our nation’s health – but there is still more to be done,” said public health minister Aileen Campbell. “As a result of our Take it Right Outside campaigns, reported exposure to second-hand smoke in the home among children under 16 has halved between 2013 and 2015 from over 11 per cent to six per cent.

“In December 2016 it became ­illegal to smoke in cars where children are present – and later this year, we will restrict the sale and availability of e-cigarettes to under-18s and introduce an offence for smoking near hospital buildings.

“We believe that by working together, and with the public’s ­support, we can achieve our goal of creating a tobacco-free generation by 2034.”

Data published this month by the Office for National Statistics (ONS) revealed that 17.2 per cent of adults across the UK smoked in 2015 – the lowest level since records began in 1974.

Figures from 2015 also showed the highest level of so-called quitters in more than four decades.

UN agency shelves vote on ties with Big Tobacco

The governing body of the International Labor Organization, which has taken millions of dollars in funding from Big Tobacco, has shelved a decision about whether to cut ties with the industry.

http://cumberlink.com/business/un-agency-shelves-vote-on-ties-with-big-tobacco/article_e5b47bd9-0f4a-5c55-8bff-c1043cb174c9.html

The ILO body voted Wednesday to delay until November a decision about whether to join other U.N. agencies that have pledged to fight tobacco-industry influence in policymaking.

The Geneva-based body is trying to calibrate its mandate to help ensure proper working conditions, particularly in an industry linked to child labor, amid a broader U.N. fight against the harmful health effects of tobacco use.

ILO has received over $15 million through two partnerships that aim to fight child labor in the industry with Japan Tobacco International and nonprofit group linked to some of the world’s biggest tobacco companies.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.