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October 7th, 2015:

Excise Tax and Illicit Trade Issues Workshop

On 28-29 September, at the invitation of the Mexican Revenue Authority (SAT), ITIC delivered a two-day workshop on excise tax and illicit trade issues for more than 50 officials from the SAT and the Mexican Finance Ministry, similar to offerings ITIC has developed for the WCO Knowledge Academy in Brussels. The workshop covered excise policy theory, excise administration and enforcement, risk-based compliance management, stakeholder engagement/partnerships, and illegal trade in spirits beverages and tobacco products.

The workshop was led by ITIC Program Advisor Liz Allen, who also delivered a presentation on change management theories and practical experience. Representatives from Her Majesty’s Revenue and Customs (HMRC) and Interpol led discussions on international partnerships between Revenue/Customs authorities in tackling global illegal trade and capacity building on legal tools and legislative drafting.

Feedback from the Mexican Finance Ministry and SAT was very positive, with many senior officials commenting on the quality of the information and exchanges and the professional development benefits derived.

Trans-Pacific Partnership: Congressional Republican Leadership May Protect Tobacco Despite Carve-Out

Charles Tiefer, Contributor I cover government contracting, the Pentagon and Congress.  Opinions expressed by Forbes Contributors are their own.

Charles Tiefer, Contributor
I cover government contracting, the Pentagon and Congress. Opinions expressed by Forbes Contributors are their own.

I am Professor at the University of Baltimore School of Law, where I focus on government contracting and Congressional legislating. I served as Commissioner on the Congressionally-chartered Commission on Wartime Contracting in Iraq and Afghanistan, in which I did three missions to Iraq and Afghanistan, and over 20 televised hearings. My chief published work on government contracting is a leading 750 page legal casebook, Government Contracting Law in the Twenty-First Century. I have testified before Congressional committees as an expert many times about Government contracting, problem departments, and government personnel. I was General Counsel (Acting) of the House of Representatives, serving15 years in that office and its Senate counterpart, and published a 1000 page treatise, Congressional Practice and Procedure. I am publishing with University Press of America a new book, The Polarized Congress: The Post-Traditional Procedure of its Current Struggles. I graduated from Columbia College with a B.A. summa cum laude and from Harvard Law School with a J.D. magna cum laude, and served on the Harvard Law Review.

The author is a Forbes contributor. The opinions expressed are those of the writer.

The Obama Administration denied tobacco (by the now-famous “carve-out”) the benefit of the potent corporate suit mechanism in the Trans-Pacific Partnership (TPP) against other nations’ regulations. Observers assume that ends the story. Not so. The fight has just begun.

Previous trade agreements have empowered the tobacco industry to batter down other nations’ regulations. For example, the tobacco industry took on Australia’s efforts to carry out rules for plain packaging. Australia spent $50 million to defend its mandate for plain packaging of cigarettes against industry opposition (a suit by Philip Morris International).

Toward the end of the TPP talks, the Obama Administration agreed to the “carve-out.” In the TPP, there is a potent arbitration mechanism for corporations to sue countries that do not follow the agreement – “Investor-State Dispute Settlements tribunals.” (ISDS) The “carve-out” provides that the cigarette industry cannot invoke ISDS.

Many think the carve-out will end the story. Not so. First, consider how much political power opposes the carve-out in the majority Republican House and Senate. The tobacco industry is not alone. A group of business trade organizations, including the National Association of Manufacturers and the U.S. Chamber of Commerce, said in a statement it would oppose “a wide range of product and industry exclusions from core rules.”

In fact, the industry has the support of the two key Senate Republican. Senator Mitch McConnell of Kentucky, the Senate majority leader, said a few months ago, “It is essential as you work to finalize the TPP, you allow Kentucky tobacco to realize the same economic benefits and export potential other U.S. agricultural commodities will enjoy with a successful agreement.”

Senator Orrin Hatch chairs the powerful Senate Finance Committee, which has jurisdiction over trade agreements like the TPP. He said that “Although I don’t support tobacco at all, I still think it was essential,” and the carve-out “will cost us some votes. And every vote is essential. And there are other things I am very concerned about. I’ve committed to read the bill, and I will read it, but right now I’m leaning against it.”

Second, the Congressional Republican leadership can employ power through the obscure procedure for trade agreements. In order to ratify the TPP, Congress does not pass the TPP itself, but passes “implementing legislation.” In theory, President Obama submits the implementing bill, and the House and Senate do not change anything but must vote it up or down.

However, in reality, in the next few months, long before the Administration submits its implementing bill, the House Ways and Means, and Senate Finance, committee, may hold hearings. For TPP, these hearings would show the agreement is controversial and it needs every vote it can get. Then, the House and Senate committees may hold an “unofficial” or “informal” committee markup, and later a “mock conference” session. Here they vote for what they want in the implementing bill. The White House is hard pressed to disregard the Republican Congressional version of the implementing bill if it wants the Republican Congress to swallow hard and approve the version Obama brought back.

What could the Republican Congress demand? First, it can demand clarifications, translations, or understandings of key points, in side agreements or side letters. It is not yet clear, for example, whether the carve-out applies to all tobacco, or only to the cigarette industry and not tobacco “farmers.” And apart from the carve-out, the agreement may be construed to create enforceable rights for tobacco, that are enforceable by other processes and not the carve-out. The implementing bill might insist the United States government pursue all such processes at the behest of the tobacco industry.

Second, Congress might insist that the implementing bill provide for pressure on other countries to waive the carve-out and agree to ISDS for tobacco. Congress might direct the President to oppose invocation of ISDS against the United States about agricultural products of any country that does not waive carve-out when pressed for relief on behalf of our agricultural product, tobacco.

Third, Congress could provide that the carve-out sunsets, or is subject to renegotiation, in two years. This could be part of some general sunset or renegotiation provision. Congressional Republicans will maintain that President Obama was not “strong enough” in the TPP negotiations. They will want that if a Republican President gets elected in 2016, he could revise the TPP – including, of course, to protect tobacco.

Readers Respond: E-Cigarettes Help Them Quit Traditional Smokes

But studies have yet to prove their efficacy as a smoking-cessation tool

By Lauren Cooper

The U.S. Preventive Services Task Force, an independent panel of experts that advises the government on public health issues, recently concluded that there’s insufficient evidence to recommend e-cigarettes as a way to stop smoking conventional cigarettes. But when we reported on that news, we heard from more than 1,300 readers, most saying that electronic cigarettes helped them kick their habit.

Anthony Porcano, for example, told us in a Facebook comment that he was “smoke-free for over 12 months by using electronic cigarettes. They literally saved my life. Lung functions and all other aspects of my health have dramatically improved.”

Smoking tobacco cigarettes still kills more than 480,000 Americans each year. And there’s no doubt that quitting yields almost immediate health dividends, slashing your risk of heart attack, stroke, and lung cancer.

But e-cigs raise worrisome health concerns of their own. Some research has found harmful chemicals in e-cig vapor, including formaldehyde, which has been linked to nose and eye irritation and an increased risk of asthma and cancer. For example, researchers at the Center for Environmental Health, a nonprofit organization based in Oakland, Calif., recently tested 97 e-cig products and found formaldehyde, the chemical acetaldehyde, or both in more than half of them.

It’s worth remembering that conventional cigarettes were once marketed as safe—and even good for you—by some of the same tobacco companies that are now producing e-cigarettes.

Other readers told us that e-cigs helped them quit after other methods failed: “I tried [nicotine] gum, patches, and pills. None of those worked. At the suggestion of a friend, I tried vaping. I started with disposables and now use an EVOD,” Lisa Marie wrote in her Facebook message, referring to a refillable type of e-cigarette. “I have been tobacco-free for a year now!” Lisa Marie writes.

Reader James Nelson recounted a similar experience in his Facebook comment, telling us, “I attempted to quit using traditional FDA approved methods (patches, lozenges, etc). None of these methods worked for me.” Nelson writes that he’s “been cigarette free for over a year,” but still uses a vaping device with nicotine-containing liquid.

While personal stories detailing the successful use of e-cigs as a smoking cessation tool are compelling, medical experts still look for evidence from randomized clinical trials—the gold standard in medical research—as proof that vaping can help tobacco smokers quit. The U.S. Preventive Services Task Force says in its report that it was only able to find two such trials done to date and neither showed that e-cigs are more effective than other smoking-cessation methods, such as nicotine patches.

FDA launches national public education campaign to prevent and reduce tobacco use among multicultural youth

“Fresh Empire” empowers teens who identify with hip-hop community to live tobacco free

The U.S. Food and Drug Administration today announced the launch of a national public education campaign to prevent and reduce tobacco use among multicultural youth who identify with the hip-hop peer crowd ‒ a group that is often hard to reach and frequently exposed to pro-tobacco images and messages. While multicultural teens identify with more than one group, the FDA is focusing on those in the hip-hop peer crowd because research estimates that they are more likely to use tobacco than other youth.

“Unfortunately, the health burdens of tobacco use disproportionately affect minority teens – particularly African American and Hispanic youth,” said Jonca Bull, M.D., the FDA’s Assistant Commissioner for Minority Health. “The ‘Fresh Empire’ campaign will help reach teens at a key point in their lives when experimenting with smoking can lead to addiction.”

The “Fresh Empire” campaign, which targets youth ages 12-17, works to associate living tobacco free with a hip-hop lifestyle through a variety of interactive marketing strategies, including the use of traditional paid media, engagement through multiple digital platforms, and outreach at the local level. The ads, and particularly the local events, feature community influencers who reinforce that tobacco use is not a part of the hip-hop lifestyle. The ads will air nationally for the first time in conjunction with the 2015 BET Hip-Hop Awards on October 13.

“We know from our research that remaining in control is an important pillar of hip-hop culture. But smoking represents a loss of control, so tobacco use is actually in conflict with that priority,” said Mitch Zeller, director of the FDA’s Center for Tobacco Products. “The ‘Fresh Empire’ campaign underscores that important message to hip-hop youth, empowering this at-risk peer crowd to live tobacco free.”

Fresh Empire’s messaging reflects hip-hop ideals such as being authentic, powerful, confident, fashionable, creative and trendsetting. The ads are intended to deliver tobacco education in a manner that is straightforward and relevant to hip-hop youth who relate to values such as working hard to achieve success and attaining or regaining control.

The “Fresh Empire” campaign will launch the week of October 12 in approximately 36 markets throughout the United States for at least 24 months. The $128 million campaign is funded by tobacco user fees.

Tobacco use is almost always initiated during adolescence ‒ close to 90 percent of established adult smokers smoked their first cigarette by age 18 ‒ making early intervention critical. In fact, youth initiation numbers show that each day in the United States more than 2,600 youth under the age of 18 smoked their first cigarette, and nearly 600 became regular smokers. Approximately 4.4 million multicultural youth are open to smoking or are already experimenting with cigarettes (i.e., have smoked fewer than 100 cigarettes in their lifetime), highlighting a critical need for targeted youth tobacco prevention efforts.

“Fresh Empire” is part of the FDA’s ongoing efforts to combat tobacco uptake and use among youth, and complements the FDA’s general market at-risk youth education campaign, “The Real Cost,” which launched in February 2014. The FDA’s campaigns are based on the best available science and are evaluated to measure effectiveness in preventing and reducing youth smoking over time.

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.

Agreements between the EU and the tobacco producers: fight against tobacco smuggling

Download (PDF, 56KB)

Liquid Nicotine Companies Co-Opt Popular Candy and Cereal Brands to Target Kids

The efforts of the traditional tobacco industry to market cigarettes to kids has been well documented. In the 1960s and ’70s, tobacco companies advertised during popular kids shows like The Flintstones, put cigarette-shaped sweets on the market, and even created the character Joe Camel to appeal to youth. Now cigarette advertising is heavily regulated by government agencies.

But with the rise of e-cigarettes comes a new way to entice kids with nicotine, and companies are jumping at the chance, illegally branding their wares with the same names, packaging, logos, and colors as popular candy and children’s cereal brands such as Cinnamon Toast Crunch and Hershey’s.

While conventional cigarettes pose a long-term health risk, the liquid nicotine used in e-cigarettes is incredibly dangerous to young kids: A mere 1 teaspoon of concentrated liquid nicotine can prove to be fatal when ingested by toddlers and small children.

A newly released report from the bipartisan child welfare lobbying group First Focus found that poison control centers reported a 1,296 percent increase in exposure to liquid nicotine from 2011 to 2014, with more than half of those incidents involving children under the age of 6.

And the five brand names most commonly used by unregulated liquid nicotine manufacturers, the report found, were Skittles, Swedish Fish, Juicy Fruit, Jolly Rancher, and SweeTarts.

The 2014 death of 18-month-old Eli James Hotaling, a toddler living in upstate New York, was the first recorded death of a child after accidentally swallowing the toxic ingredients used to refill e-cigarettes, according to Safe Kids Worldwide. Eli began convulsing and was pronounced dead at his local emergency room due to cardiac arrhythmia induced by nicotine ingestion.

“The lack of federal regulation of e-cigarettes has created a ‘Wild West’ where children’s favorite cereal spokescharacters are now selling them tobacco,” says First Focus president Bruce Lesley. “The fact that so many e-cigarette retailers have gotten away with this proves that the federal government isn’t paying enough attention.”

And it’s not only younger children who are at risk. The CDC reports that e-cigarette use among middle and high school students tripled from 2013 to 2014. Use of e-cigarettes among high school students was found to have increased in that timespan from 4.5 percent to 13.4 percent, translating to a rise from approximately 660,000 to 2 million students. During the same period, the rate of use for middle school students tripled from 1.1 percent to 3.9 percent — an increase from approximately 120,000 to 450,000 students.

With older children using e-cigarettes at skyrocketing rates, younger children are more likely to come across liquid nicotine at home. Liquid nicotine is easily purchased online, marketed as candy, and packaged to look as such too.