Implementing laws to criminalize the illicit trade in tobacco products is not effective without adequate enforcement and strict application of meaningful penalties. All too often, governments are not fully aware of the scale or consequences of the illicit cigarette trade and tackling the problem is not given sufficient priority.
One company or even an industry alone cannot stop illicit trade. We need partners in government and law enforcement, and believe those efforts will be most successful if they are focused on the following:
Experience in a number of countries has shown that aggressive, well-funded enforcement combined with strong legal deterrents can make a significant impact. In 2013, increased law enforcement actions in Italy by the Finance Police resulted in over 250 arrests, the closure of 23 illegal warehouses and the shuttering of several illegal retailers. The results speak for themselves, with the level of illicit trade (non-domestic) dropping from 11.4% in the fourth quarter of 2012 to 5.2% in the same period of 2013.
Similarly, an integrated anti-contraband strategy by the UK’s HMRC has delivered results. According to Priti Patel, former Exchequer Secretary to the Treasury:
Since 2000, when Her Majesty’s Customs & Excise [HMRC] introduced its first strategy to tackle illicit tobacco, the progress in the fight against tobacco smuggling has been considerable. The size of the illicit cigarettes market has been halved and the illicit market for hand-rolling tobacco has reduced by a third. More than 26 billion cigarettes and 4,300 tonnes of hand-rolling tobacco have been seized. There have been more than 4,000 criminal prosecutions for tobacco offences. We have achieved a lot, but even this reduced illicit market still costs the taxpayer over £2 billion a year in lost revenues.