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April 25th, 2010:


obama-signingLast updated: April 1, 2010

Source: Tradingmarkets

Today U.S. Senator Herb Kohl’s bill, the Prevent All Cigarette Trafficking (PACT) Act, was signed into law by President Barack Obama. The PACT Act cracks down on black market tobacco selling by closing loopholes in current tobacco trafficking laws, enhancing penalties for violations, and providing law enforcement with new tools to combat the innovative methods being used by cigarette traffickers to distribute their products. In 1998, the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) had six active tobacco smuggling investigations. Today there are more than 400 open cases.

“The cost of tobacco smuggling to Americans is not merely financial. Internet tobacco sales have been used by terrorist and organized crime groups to raise millions of dollars to support their illicit activities. This new law will help us ensure that we no longer continue to enable terrorist organizations to exploit the weaknesses in our tobacco laws to their advantage, allow states lose tax revenue, and provide children with easy access to tobacco products sold over the Internet,” Kohl said.

Hezbollah, al Qaeda and Hamas have all generated significant revenue from the sale of counterfeit cigarettes. Hezbollah is estimated to have earned $1.5 million between 1996 and 2000 through tobacco smuggling. That money is often raised right here in the United States, and then funneled back to these international terrorist groups.

Kohl noted that cigarette trafficking, including the illegal sale of tobacco products over the Internet, costs states billions of dollars in lost tax revenue each year. It is estimated $5 billion of tax revenue is lost, at the federal and state level, each year. As lost tobacco tax revenue lines the pockets of criminals and terrorist groups, states are being forced to increase college tuition and restrict access to other programs because of these lost revenues.

The Internet represents a new obstacle to enforcement. Illegal tobacco vendors around the world evade detection by conducting transactions over the Internet, and then shipping their illegal products around the country to consumers. Just a few years ago, there were less than 100 vendors selling cigarettes online. Today, approximately 500 vendors sell illegal tobacco products over the Internet.

The PACT Act will:

* Strengthen the reporting requirements for interstate cigarette sellers.

* Increase the criminal penalty from a misdemeanor to a felony and create a substantial civil penalty for violations, including violations of the reporting requirements and state tobacco tax laws.

* Grant federal and state law enforcement officials more powers to investigate and prosecute violators.

* Prohibit the United States Postal Service from delivering tobacco products

The PACT Act (S. 1147) was passed under unanimous consent by the Senate on March 11, 2010. On March 17, the House of Representatives passed identical legislation (H.R. 1676) by an overwhelming majority, 387 to 25.

Smokers may pay A$20 a pack

1311Last updated: April 14, 2010

Source: Nine MSN News

Smokers could pay up to $6.50 more for a packet of cigarettes under a new tobacco tax being considered by the federal government.

The proposed tax hike would see the price for a packet of 30 cigarettes rise from an average $13.50 to $20 within a three-year period, News Limited newspapers report.

The plan is being considered as a way to fund the federal government’s landmark $18 billion health reforms and could be included in next month’s budget.

The government believes the tax could provide almost two-thirds of the $3 billion in extra revenue it needs to help convince the states to support the reforms.

The government’s National Preventative Health Taskforce believes a $6.50 rise for the average pack of cigarettes could reduce the number of smokers by one million within 10 years.

Australia currently has one of the lowest tobacco taxes in the developed world, at 68 percent.

The proposed changes would bring the nation in line with the 75-80 percent benchmark in place in most other countries.

Polls have shown the public is overwhelmingly in favour of a rise in the tobacco tax so long as the revenue is spent on health.

Tobacco companies pay out lofty fines

who-got-finedLast updated: April 14, 2010

Source: Montreal Gazette

Two tobacco giants paid fines Tuesday that totalled $225 million for their role in cigarette smuggling in the early 1990s — which the federal government says is the largest criminal levies ever imposed in Canada.

JTI-Macdonald Corp. and R.J. Reynolds also reached a settlement in a lengthy civil suit with the provincial and federal governments.

The companies paid their fines Tuesday morning after pleading guilty in the Ontario Court of Justice, the federal government said in a news release.

“Taken together, this is the largest amount ever levied in Canada,” National Revenue Minister Keith Ashfield told a news conference.

The fines, combined with the civil settlement, will put a total of $550 million in provincial and federal coffers, bringing an end to a decade of litigation involving contraband tobacco shipped between the United States and Canada.

Cigarette smuggling raged through the early 1990s, forcing governments in Canada to eventually reduce tobacco taxes to stem the tide of contraband flowing across the border.

JTI paid $150 million after pleading guilty to “aiding persons to be in possession of tobacco not packaged in accordance with the Excise Act,” the federal government said in a release.

Northern Brands International Inc. — a company affiliated with R.J. Reynolds — pleaded guilty to a Criminal Code conspiracy and paid a $75-million fine ordered by the court.

An anti-smoking group on Tuesday condemned the deal with the governments as a settlement for “chump, saying it amounted to a “sell-out” and a “sweetheart deal” that fell far short of the amount the government originally sought.

“In court papers from 2005, the federal and provincial governments filed claims for nearly $10 billion against JTI-Macdonald Corp. and related companies over contraband,” said Garfield Mahood, executive director of the Non-Smokers’ Rights Association

“The settlements prove that tobacco crime does pay, big Time, as it has for decades. The government settled for “chump change”.”

The civil settlements with the two companies come two years after the federal and provincial governments settled with other cigarette makers — Imperial Tobacco and Rothmans, Benson and Hedges, which paid fines of $200 million and $100 million, respectively, in separate court actions.

The federal government thus labelled Tuesday’s fine as the biggest, when added together, because they considered the cases one file, dealt with by one judge, rather than separate cases.

The money in the latest civil settlement will be shared between the federal government and the provinces, with Ontario, Quebec, British Columbia, and Ottawa receiving the biggest settlements because they were the ones that lost the most.

A spokesman for the Canada Revenue Agency said the fines and settlement amount to more than the governments lost in excise taxes.

(Photograph by Stringer, Reuters)

Memo to Barbara McDougall: Resign!

Former Conservative cabinet minister Barbara McDougall attends the Munk Debates in Toronto on Dec. 1, 2008.

Last updated: April 13, 2010

Source: The Globe and Mail

If for whatever reason, dear reader, you ever doubt that Canada needs to rid itself of this particular squad of Tories I offer the following from today’s fish wrap:

“The huge charitable foundation run by software czar Bill Gates and his wife has yanked funding from an anti-smoking research project in Africa because of the tobacco industry links of a former Canadian cabinet minister.

The Bill & Melinda Gates Foundation’s partner on the project is Canada’s International Development Research Centre, a federally funded agency whose chairman is former Tory external affairs minister Barbara McDougall. When the Gates group found out that Ms. McDougall was until last month on the board of directors of Imperial Tobacco Canada Ltd., it promptly pulled the remaining funds from its initial $5.2-million (U.S.) grant…

The Gates foundation was alerted by the African Tobacco Control Alliance, a Togo-based group that was organizing some of the research project and was set to co-host a conference with IDRC in Dakar, Senegal. Last Wednesday the African group announced it was pulling out of the meeting because of Ms. McDougall’s perceived conflicts, and the Gates foundation followed up by cancelling its funding for the remainder of the project two days later.

Rachel Kitonyo, chair of the ACTA, said in an interview from Nairobi that her group could not continue the work because its constitution forbids it from having any direct or indirect links to the tobacco industry, and it does not want to work with partners that do.”

This is the sort of queasy-making leaden irony that beggars satire. So, I wont even bother trying to be funny. Barbara McDougall is a partisan hack who has embarrassed Canada in the eyes of the world. She should resign today.

Written by Douglas Bell

(File photo: Arantxa Cedillo for The Globe and Mail)

Bus drivers want signs for no-smoking zone

508475767_e7c70e8079_oLast updated: April 13, 2010

Source: South China Morning Post

Bus drivers have urged the government to clearly define no-smoking areas when the smoking ban is extended to all outdoor bus terminuses later this year.

New World First Bus Company Staff Union chairman Chung Chung-fai said bus drivers would have to move to nearby pedestrian areas to smoke, but the boundaries of outdoor transport interchanges were not as clearly defined as covered areas.

“The government should state clearly – such as with banners – where exactly the no-smoking areas are. Otherwise it may be easy for us to break the law,” Chung said.

About 60 per cent to 70 per cent of bus drivers are smokers, Chung said.

The smoking ban will be extended to 128 outdoor transport interchanges in the city by December, including the Star Ferry Pier terminus in Tsim Sha Tsui and the Wan Chai Pier terminus.

But five terminuses will be exempt – those at the Central Ferry Piers, the airport, Ocean Park, Nam Cheong Station and Hong Kong Convention and Exhibition Centre.

Undersecretary for Food and Health Professor Gabriel Leung said these terminuses would undergo major renovation later this year.

“The layout and bus routes may change after the renovation. It will be meaningless if we assign certain areas to be non-smoking now,” he told the Legislative Council health panel yesterday.

Lawmakers also expressed concern over the boundary issue during the panel meeting.

Fred Li Wah-ming of the Democratic Party said as outdoor terminals had no obvious boundary, tobacco control officials might have difficulties prosecuting.

Leung said the government would make sure that the signs would be “clear and everywhere”.

Kwai Tsing district councillor Lam Siu-fai said there were a number of bus terminuses in the district that had “dubious boundaries”.

“Some terminuses do not have fences,” he said. “When prosecuted, smokers can say they just unknowingly stepped into the area.”

Sha Tin district councillor Chan Kwok-tim agreed with Lam and urged the government to recruit more tobacco control inspectors, otherwise the smoking ban would just “remain on paper”.

“I always receive complaints from residents that many people are  still smoking in restaurants, but it has been more than three years  since the indoor smoking ban,” Chan said.

Written by Ng Yuk-hang

African health group welcome Gates Foundation Action to shield public health policies from tobacco

gates-foundationLast updated: April 12, 2010

Source: Marketwire

The African Tobacco Control Alliance (ATCA) today welcomed the decision of the Bill & Melinda Gates Foundation to terminate a multimillion dollar grant to a leading international health research agency because of the potential of tobacco industry influence on the agency’s policies.

ATCA, a coalition of African tobacco control organizations had announced on Wednesday that it was pulling out from a planned Pan-African tobacco control meeting in Dakar which it was to co-host with the Canadian International Development Research Centre (IDRC) after discovering that the IDRC has on the Board of its Directors a person who also serves the interests of tobacco industry. The Dakar meeting was to be financially supported by the Gates Foundation.

Ms Rachel Kitonyo, ATCA chair said , “We are extremely disappointed to discover that Ms. Barbara McDougall who is currently the Chair of IDRC board of Directors is also a current chair of the Imperial Tobacco Canada Ltd Corporate Social Responsibility committee and was until last month a Director on the Board of Imperial Tobacco. This is clear conflict of interest and we find it deplorable.”

ATCA thanks the Bill and Melinda Gates Foundation for its principled decision in immediately terminating a contract and partnership with IDRC following this revelation. The foundation’s decision is an important signal to philanthropies and governments that they must be ever vigilant in protecting their policies and programmes from interference by the tobacco industry.

The foundation terminated a US$ 5.2 million grant to the Canadian International Development Research Centre (IDRC) on Friday after it learnt of the conflict of interest. The purpose of the grant was to support tobacco control activities in Africa.

The foundation, in a statement, expressed its “deep disappointment” at the revelation and felt that the conflict of interest for the IDRC is “unacceptable” and counter to the foundations work in supporting “meaningful tobacco control programs (sic) in Africa”. The foundation added that it remained committed to tobacco control work and will partner with the anti-tobacco community to

reduce tobacco use in Africa.

The African Tobacco Control Alliance (ATCA) welcomes this decision by the Gates Foundation. “In ountry-after-country the tobacco industry seeks to avoid, delay, dilute and defeat laws and policies designed to reduce tobacco use. It is vital to protect public health policies from tobacco industry interference and the Gates Foundation has shown extraordinary leadership in this regard”, says Ms Kitonyo.

The African continent is a key growth market for tobacco manufacturers and an increase in tobacco use will bring with it addiction, disease, death and an increase in poverty. This is a direct violation of IDRC’s mission of supporting research that will help to build healthier, more equitable, and prosperous societies in lower and middle income countries (LMICs). The chair of the IDRC cannot serve two opposing causes at the same time.

The issue also poses a major challenge to the Canadian government, as the IDRC is a Canadian crown corporation and the government appoints its chair. ATCA urges all governments to recognize that it is fundamentally wrong to appoint a tobacco industry official to chair a government agency with responsibilities for health.

The IDRC appointment also runs counter to Canada’s obligations under a global tobacco treaty, the WHO Framework Convention on Tobacco Control (FCTC).

Article 5.3 of the FCTC requires governments to protect public health policies from tobacco industry interference. Furthermore, international guidelines adopted to interpret this obligation require that governments “not allow any person employed by the tobacco industry or any entity working to further its

interests to be a member of any government body, committee or advisory group that sets or implements tobacco control or public health policy,” The IDRC appointment is against both the spirit and the implementation guidelines of the FCTC and the government of Canada which has long been a leader in tobacco control must recognize this.

A 2008 WHO report reviewed the tactics used by tobacco companies to interfere with tobacco control policies. The strategies include direct and indirect political lobbying and campaign contributions, establishing inappropriate relationships with WHO staff, discrediting WHO or WHO officials, using surrogates, such as front groups and trade unions, distorting scientific research, and buying influence through corporate social responsibility programmes.

ATCA calls on Canada to act quickly to correct the situation and urges all governments to comply with the spirit and letter of Article 5.3 of the FCTC.

High taxes don’t result in cigarette smuggling, say experts at Turkish forum

cigs_hidden_610Last updated: April 9, 2010

Source: Hurriyet Daily News

The National Committee on Cigarettes and Health, or SSUK, organizes a conference in Istanbul that brings together academics and experts from Turkey, Hong Kong and India. Using facts and figures, they argue that Turkey’s smoking ban has not led to more cigarette smuggling and call for further cigarette tax hikes in the country

The theory that high taxes on cigarettes increase smuggling was criticized by experts from Turkey, India and Hong Kong who gathered in Istanbul on Wednesday.

The experts met to discuss the effect of smoking bans and raising taxes on cigarette smuggling.

Along with the National Committee on Cigarettes and Health, or SSUK, in Turkey, they presented facts and figures to show that high cigarette prices will deter smoking and will not lead to significantly more cigarette smuggling.

There have been reports in the Turkish media that cigarette smuggling has increased 20 percent because of the smoking ban, which is believed to reduce government tax revenue.

Experts, however, disagree; SSUK President and professor Elif Dağlı said cigarette smuggling is not likely to be individual work but the result of organized crime.

In order to increase smuggling by 20 per cent in Turkey, one would need a staff of approximately 20,000 people to work in distribution and sales, she said.

“Smuggling has nothing to do with cigarette prices, this is a method employed by the industry to scare the government,” said the professor. “If you keep the cigarette prices high, you increase tax income, reduce tobacco consumption and preserve health.”

However, she said she expected the tobacco industry would attempt to reduce the price to lower government tax income in the coming months and lobby the government into loosening the smoking ban.

She further offered statistics on how cigarette smuggling is high in countries with lower taxes and lower in the ones with higher taxes.

“The most important factor in reducing tobacco consumption is having high taxes applied on cigarettes. As doctors, we say high cigarette prices are good for [national] health,” she said.

1 billion to die from smoking by 2100

Dr. Lam Tai-Hing, director of the school of Public Health from the University of Hong Kong, said the most important method for fighting against smuggling is to give resources to customs, as smuggling will go on even without raising taxes.

Dr. Prakash C. Gupta, meanwhile, director of the Healis-Sekhsaria Institute of Public Health in Mumbai also said smuggling happens to countries with low access control and is not a function of price.

To further emphasize the fact that smoking kills, Lam estimated that two-thirds of smokers will be killed by related diseases if they start smoking at a young age, with a quarter dying between the ages of 35 to 69.

He said by 2030, 8 million people could be killed per year, with 80 per cent of them in low-and-middle income countries.

In the last century, smoking killed 100 million people, but is expected to kill 1 billion people in this century. Moreover one-third of adults are also exposed to second hand smoking, which also kills about 600,000 people per year.

Lam said raising tax is the most effective way to reduce tobacco consumption, adding that cigarette taxes should be at least 75 per cent of the price.

“Politicians may become unpopular if they impose high taxes but tobacco is one product that the consumers want to give up,” Gupta said.

Details of the smoking ban in Turkey

Turkey’s smoking ban took effect on July 19, 2009, outlawing smoking in all enclosed public places, such as bars, cafes, restaurants and places where nargile is smoked. Smoking is also not allowed in taxis, trains, outdoor stadiums as well as private and public schools.

Hotels are also required to set up rooms with ventilation systems that meet established standards for guests who smoke. These rooms must be on the same floor or corridor of each other.

Under the legislation, special sections made for smokers cannot exceed 10 percent of the overall space, and must be isolated from other enclosed areas. Similar-sized areas can also be created on the decks of sea-transport vehicles for smokers on intercity and international routes.

People under the age of 18, meanwhile, will not be allowed to enter these sections. Businesses are additionally required to make arrangements that protect nonsmokers from fumes if smoking is allowed in open-air parts of their premises.

Individuals who do not obey the ban are fined 70 Turkish Liras, while those who let people smoke in enclosed areas are fined between 572 and 5,723 liras.

Despite strong industry opposition and the belief by some that the ban is too strict, Turkey’s smoking ban was highly praised by other countries at this year’s Asian-Pacific Organization for Cancer Prevention congress, according to Dr. Nejat Özgül, deputy president for the anti-cancer department at the Health Ministry.

“If we want to win the war against cancer, we have to win the war against tobacco,” he said.

Rationalise tax on tobacco products to save millions of lives: Experts

the-histogram-of-cigarette-taxLast updated: April 9, 2010

Source: Business Standard

About 19 million lives could be saved every year if India increased tax on beedis to 40 per cent from the present 9 per cent and on cigarettes, 78 per cent from 38 per cent, said experts here today.

Director of the National Institute of Public Finance and Policy M Govinda Rao said the tax structure in India on tobacco was not based on nicotine content. Cigarettes are taxed based on their length. Tobacco taxes were not regularly adjusted for inflation and over time tobacco products were becoming increasingly affordable, he added.

A report — Economics of tobacco and tobacco taxation in India — by both Indian and international economists released here today states simplifying the tax system by reducing differential taxes across products will help convey a clear message that all tobacco products are harmful. The report is part of a series of the Bloomberg Initiative to reduce tobacco use.

Studies of price elasticity in India have found that a 10 per cent increase in tobacco prices is estimated to bring down beedi consumption by 9.1 per cent and cigarette consumption by 2.6 per cent.

Director of Centre for Global Health Research, Toronto, Prabhat Jha, said the number of smokers in India were increasing fast. In urban areas, there has been a near doubling of smokers with 13 per cent smoking prevalence in 1999 increasing to 25 per cent by 2006.

In addition, he said, quitting before a disease struck, was highly uncommon in India. “Only two per cent of Indian adults are ex-smokers as compared to 40 per cent in the US or UK, or 15 per cent in Thailand. With an estimated 120 million smokers, India has the second-largest group of smokers in the world after China.

The report points out that cigarette taxes of 38 per cent are way below the recommended rates of 65-80 per cent of retail price present in countries with effective tobacco control policies. Beedis are very cheap, with an average pack costing Rs 4. Taxes on beedis average only nine per cent of its retail price, it states.

Hong Kong, China: tax tricks galore

magic-shop-money-hatLast updated: April 11, 2010

Source: British Medical Journal

Hong Kong, China (HK) went for more than eight years without increasing tobacco tax, partly because its thriving economy simply did not need the extra revenue, but undoubtedly also partly due to intensive and persistent lobbying by tobacco interests. When at last a rise was announced last year, it must have come as a nasty shock to the industry—it was 50 per cent (see Hong Kong, China: tax rise at last. Tobacco Control 2009;18:164–5). The big tobacco companies then hiked up the price to counteract the loss of profits from the large decrease in duty-paid sales they knew would result.

Nevertheless, tobacco companies saw a red warning light and in January this year, about a month before the annual budget announcements, a rash of pro-tobacco public relations stunts began to appear in news media. Some could not be traced with certainty, but others were the work of a previously little-noticed foundation called the Lion Rock Institute, whose mission includes supporting ‘libertarian’ free trade and protecting the people of HK from ‘creeping socialism’. Lion Rock, purportedly independent, has acknowledged that it is ‘supported’ by funding from the Atlas Economic Research Foundation of the USA, a free-market think tank which supports country level institutes like Lion Rock in many countries around the world. Atlas has acknowledged substantial tobacco industry funding.

Lion Rock’s case for HK’s finance minister not to put up tax again was expressed in a policy paper entitled, ‘Failed tobacco tax sees hopes go up in smoke’, purportedly based on official data. It was written or at least defended by a member of staff apparently barely out of college, but willing to debate with experts with considerable knowledge of the local tobacco tax situation. It appeared in The Standard, a tobacco-friendly daily newspaper owned by a local tobacco company boss, and on Lion Rock’s website. Its main points were repeatedly regurgitated in various media, including radio appearances. One of these was on an English language radio programme moderated by none other than the young staff person’s boss at Lion Rock. Despite numerous requests, Lion Rock did not respond to requests that it confirm whether tobacco industry funding was taken for the work in question.

Perhaps more serious were the many newspaper articles pegged on Lion Rock’s paper, all of them virtually presenting a certainty that the finance minister could not possibly raise tax again, as last year’s 50 per cent rise had been a disaster in terms of increasing the sales of smuggled cigarettes and denting revenue. Many articles either reported or inferred that duty-paid cigarette sales were up, not down; and some even took a hand in it themselves, no doubt aided by tobacco-friendly public relations nonsense, including concerns that the increasing numbers of smokers forced to buy counterfeit cigarettes may be exposing themselves to even more damage than from legitimate products. One even wrote that laboratory tests showed Chinese counterfeit cigarettes, in addition to higher nicotine and carbon monoxide than brand name cigarettes, ‘contain impurities that include insect eggs and human faeces.’

It must have been obvious from the start to the very people that the report was trying to influence that it was, quite simply, rubbish. The HK government learned some years ago that increased smuggling requires increased enforcement. As a result, there have been significantly more customs officers deployed to tobacco anti-smuggling work, resulting in increased numbers of smuggling cases and arrests—but the quantities being seized have been falling. So the total number of cigarettes seized has not risen since last year, but fallen significantly. In the words of a departmental official, “Evidently, our stringent enforcement has cornered the culprits to scale down their operation.”

In addition, claims that the tax rise had not affected consumption, and that the finance minister must be out of pocket, are the opposite of the truth. After last year’s tax rise, sales of duty paid cigarettes decreased by more than 30 per cent, and a study by the University of Hong Kong showed that the number of young people calling its quit-smoking hotline jumped by 111 per cent after the increase. As for government tobacco excise revenue, that did not fall, but rose, by two per cent. It came as small surprise, though nevertheless as a bitter disappointment to public health organisations, that a strenuous rebuttal of the false claims went largely unreported. Even an open letter to the government by a raft of blue chip names failed to get any mention at all.

The finance minister duly announced no change in tobacco duty, referring to last year’s rise as if it were sufficient to raise tobacco tax only once in a while. However, he did abolish duty free tobacco concessions, and publicly acknowledged that HK tobacco duty accounted for only about 60 per cent of the retail price of cigarettes, rather than the 75 per cent recommended by the World Health Organization. Overall, though, the budget was a significant victory for the tobacco industry. As to the future, even though the finance and excise departments know what nonsense is peddled by the industry, public health advocates must be far from hopeful of significant change in such an apparently tobacco friendly environment.

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Smoke-Free Act articles from around the world

Source: British Medical Journal

Below are several PDFs related to Smoke-Free initiatives around the world.

Argentia SF effect health hospitality workers

Argentina SF Glantz

Canada SF Ontario Act evaluation

England Quit attempts after SFA

Greece Assertiveness re SFA

Portugal SF hospitality, evaluation