factors encouraging smuggling criminal organisation sophisticated distribution no control over...
TRANSCRIPT
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Factors encouraging smuggling
• Criminal organisation
• Sophisticated distribution
• No control over movement
• No duty during transit
• Illegal sales tolerated
• Difficulty telling legal from illegal• Active support of tobacco companies
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Factors reducing smuggling
• Prominent tax stamps• Severe penalties• All in chain licensed• Tracking by serial number• Dispatch only to responsible destination• Label with destination• Increased anti-smuggling action• Action against companies
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Legal action against tobacco companies for alleged smuggling
• Oct. 2001: UK Dept of Trade investigates BAT
• Jan. ’02 Canada: Rothmans offices searched re smuggling to US, 1989-96
• Late ’01-early ’02: European Commission sues US companies for smuggling
• Feb. ’02(?): European Union accuses US companies of violating Iraq sanctions
• Early-mid ’02: US government sues PM for ‘racketeering’
• Oct. ’02: EU Commission sues Rothmans in USA for money laundering
• Jan. ’03: German boss of Reemtsma (Imperial) held by police
• Jan. ’03: Iraqi sues RJT over loss of (smuggling) earnings!• Mar. ’03: 8 JT (RJR) executives charged with C$1.2 Bn tax fraud from
smuggling 1991-96
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Hanoi,Vietnam2003
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Hanoi, Vietnam 2003
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Vietnam, 2003
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Some notes from BAT
“Smuggled sales into Vietnam are currently estimated at approximately 7 bn [billion] p.a. although prior to a crackdown in 1990 (when [it was eliminated for 18 months) it was in the region of 12-17 bn p.a.”
“SE [State Express] 555 is the major smuggled brand and there is no doubt it has a tremendous image and sales potential in the country.”
“BAT has resisted agreeing to manufacture 555 in Vietnam due both to concerns about the ability to sell the brand as a locally manufactured product and to the possible impact of a licence outside Vietnam.
“…Vinataba [the Vietnamese State monopoly] sees a licence of 555 as an attractive opportunity for the JV [joint venture], and believes that BAT’s opposition to a licence is simply to ‘protect the smuggling’ trade.”3
From a BAT internal document (12 May 1995):
“In Vietnam, smoking State Express 555 means that you’ve made it.”
Comment by Fred Combe, general manager of BAT, Vietnam, 1998:
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Vietnam, 2003