Smuggling

Tobacco smuggling undermines one of the most important health policies - raising tobacco tax to create a financial incentive not to smoke. Tobacco smuggling costs lives through increased smoking. It has been estimated that about one-third of all internationally traded cigarettes are smuggled (350 billion cigarettes per year), causing billions of pounds of lost government revenue (over £2 billion in the UK alone).

Tobacco smuggling is an international problem requiring a global response. A protocol is being developed as part of the internationally agreed treaty - the Framework Convention on Tobacco Control (FCTC).

Under Article 15 of the FCTC, governments will be required to:

• monitor and collect data on cross border trade in tobacco products including illicit trade
• enact or strengthen legislation against illicit trade in tobacco
• destroy counterfeit and contraband tobacco
• adopt and implement measures to monitor and control the distribution of tobacco products
• adopt measures to enable the confiscation of proceeds derived from smuggling

ASH supports a protocol which includes systems to enable the tracking and tracing of tobacco through the supply chain; anti-money laundering provisions; better record keeping and enhanced law enforcement.

There is considerable evidence that tobacco companies have orchestrated tobacco smuggling for their own commercial interests. As a result of investigations and internal document disclosures, major multinational tobacco companies have been subjected to inquiries and legal action for racketeering. In response to these legal actions, the companies have begun to work more collaboratively with governments to try to curb the problem.

For example, in 2004, Philip Morris International brokered an agreement with the European Commission to put an end to a long-running legal action with the EU and in return agreed to a series of measures to stop the illicit trade in Philip Morris products. In the UK, the major tobacco companies have signed voluntary agreements designed to reduce smuggling (see Memoranda of Understanding below) but, unlike the EU-Philip Morris agreement, these are not legally binding.

Do you have information about tobacco smuggling? Ring 0800 59 5000 (UK) and consult Customs Confidential in complete confidence.

 

• Smuggling and the UK

  Smuggled cigarettes cost the UK Treasury over £2 billion in lost revenue each year.  While tobacco smuggling is an international problem t

• Memoranda of Understanding

  In March 2006 HM Revenue & Customs signed updated Memoranda of Understanding with the UK tobacco companies, replacing the original ones. Bri

• International tobacco smuggling

  Tobacco smuggling is an international problem requiring a global response. A protocol to tackle the problem is being developed under Article 15...