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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.


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