Tobacco.org

• Diplomats arrested for cigarette smuggling 

Swedish police have arrested two North Korean diplomats on suspicion of smuggling 230,000 cigarettes into the Nordic country, the Swedish Customs Office said Friday.

The pair, a man and a woman who have diplomatic status in Russia, were stopped by Swedish customs officers Wednesday morning as they drove off a ferry from Helsinki, the Finnish capital.

Customs officials discovered Russian cigarettes in the car driven by the couple, Swedish Customs spokeswoman Monica Magnusson told Reuters.

The two North Koreans claimed diplomatic immunity.

"They were accredited as diplomats in Russia, but had no accreditation in Sweden," she said. "They were arrested on suspicion of smuggling."

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• KRASOVSKY: Does tobacco industry need to be saved? 

Tobacco tax increases are the most effective way to encourage people to stop smoking.

Ukrainian President Victor Yushchenko, citing concern for the tobacco industry, on Nov. 11 vetoed legislation that would have hiked the excise tax on tobacco products once more.

It is worth remembering that - even though tobacco excise taxes were increased in September 2008, and again in February and May of this year - cigarette prices in Ukraine remain among the lowest in Europe. This leads directly to a public health catastrophe for the nation and creates conditions for rampant smuggling of made-in-Ukraine cigarettes to other nations. . . .

However, tobacco companies in Ukraine claimed that this tax increase would have been disastrous for their business. . . .

Transnational tobacco companies came to Ukraine in 1993. They promised employment, investment and revenue. Now they control 99 percent of the tobacco production in Ukraine. In 1992, Ukraine produced 9,000 tons of tobacco leaves. However, despite huge increases in cigarette production, tobacco growing has almost disappeared in the country. In 1996-2008, the foreign trade balance of tobacco leaves and products was negative for Ukraine and totaled more than $2 billion. It actually means that Ukrainian smokers invested $2 billion in the economies of other nations.

What tobacco companies actually produce is death. . . .

Many politicians in Ukraine already understand that high tobacco taxes are good both for public health and public revenues. I hope that the current and future president of Ukraine will understand this as well.

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• Senate Judiciary Committee Approves Internet Tobacco Bill 

The U.S. Senate Judiciary Committee unanimously approved legislation yesterday that will help combat online cigarette sales and prevent youth access to tobacco products.

The Prevent All Cigarette Trafficking (PACT) Act closes gaps in current federal laws regulating “remote” or “delivery” sales of cigarettes and smokeless tobacco products. The bill enhances penalties for violations and provides law enforcement with new tools to combat the innovative methods being used by cigarette traffickers to distribute their products.

“Tobacco smuggling has developed into a popular, and highly profitable, means of generating revenue for criminal and terrorist organizations,” said Sen. Herb Kohl (D-WI), noting that cigarette trafficking, including the illegal sale of tobacco products over the Internet, costs states billions of dollars in lost tax revenue each year.

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• Gristedes chief still on warpath on cheap Indian cigarettes 

The freshly remodeled Gristedes supermarket on 25 University Place has expanded its space, adding new sections for beer, hot food, a salad bar, bakery and organic products, all looking like crowd-pleasers beneath Thanksgiving decorations strung above the aisles.

But cigarettes are no longer on sale here -- seemingly a sign of the times in this upscale Greenwich Village neighborhood near New York University.

"We haven't had them for some time now," said an assistant manager who identified himself only as Thomas. He noted that cigarettes are available at other Gristedes stores in New York (about 20 still carry them), even though he believes the demand is down. The main reason for the decline in tobacco sales, another Gristedes manager said, is that "people know where they can get them elsewhere" for half the price that conventional retailers in New York charge -- upward of $95 per carton, with $4.25 in state and city taxes tacked on.

He was alluding to untaxed tobacco sold on Indian reservations, a subject that has bedeviled convenience-store operators and New York governors from Cuomo to Paterson.

Led by its Greek-born owner and C.E.O., John Catsimatidis, a longtime New York City mayoral wannabe who smokes an occasional cigar, Gristedes Foods Inc. has claimed in protracted litigation that Indian merchants on two Eastern Long Island reservations are luring away New York customers, and even helping to fund organized crime gangs and terrorist groups like Hezbollah with bulk sales, a charge some politicians dismiss as absurd but others solemnly repeat. . . .

Since he cares so much about health, why does he sell any cigarettes at his grocery stores?

"There is such a thing as freedom of choice," the mogul replied. "I lecture my wife, who smokes, and tell her, Why don't you just have one or two instead of more? It's like what the Greek philosophers say: Everything in moderation."

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• Philip Morris USA Sues Retailers to Stop Counterfeit Cigarette Sales  

Philip Morris USA (PM USA) filed lawsuits against ten retailers selling counterfeit versions of the company's Marlboro� brand cigarettes in New York and New Jersey.

"The New York metropolitan area continues to be a lucrative market for counterfeit and contraband cigarette smugglers," said Joe Murillo, vice president and associate general counsel, Altria Client Services, speaking on behalf of PM USA. "High excise taxes, coupled with New York state's lack of effective tax enforcement, only makes the problem worse," added Murillo.

"These lawsuits are the latest in a series of filings by Philip Morris USA aimed at combating the sale of counterfeit cigarettes in New York and New Jersey," said Murillo. Since May 2009, Philip Morris has filed lawsuits against 27 retail locations in New York and New Jersey for selling counterfeit Marlboro� brand cigarettes

In addition to violating many trademark laws, counterfeit cigarettes are almost always sold without the appropriate federal and state excise tax. The counterfeit cigarettes purchased from the retailers named in today's suits bore no tax stamp or a counterfeit tax stamp. As a result, the applicable excise taxes were not paid. . . .

Eastern District of New York

Maria’s Deli Grocery 143-20 101 Avenue, Richmond Hills, NY 11419

Loveras Grocery 996 Nostrand Avenue, Brooklyn, NY 11225

Southern District of New York

Aloshe Mini Market 1889 Guerlain Street, Bronx, NY 10461

El Barrio Grocery Deli 39 West 183rd Street, Bronx, NY 10453

Fernandez Grocery Corp. 1665 Madison Avenue, New York, NY 10029

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• Philip Morris USA sues over counterfeit Marlboros 

Philip Morris USA is accusing 10 New York and New Jersey retailers of selling counterfeit Marlboro cigarettes.

The nation's largest tobacco company announced the federal lawsuits against the retailers Thursday.

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• Internet Cigarette Sales--an Illegal Rip-off of Our Nation / It's Time for the Feds to Act! (PDF) 

• Intent on determining whether progress has been made in curbing the illegal Internet sale of tobacco products, an American Wholesale Marketers Association (AWMA) researcher selected 27 Internet sites at random and purchased 22 cartons of cigarettes using a Visa card and a prepaid Visa card. Of the 27 random sites selected using the Internet search engine Google, 74% allowed the use of a credit card—Visa, Diners Club, MasterCard, and/or American Express.

• None of the cigarettes purchased carried U.S. state tax stamps, and in no case were taxes collected at the time of purchase.

• The American Wholesale Marketers Association will notify proper state authorities of the purchases and pay the appropriate amount of tax to comply with the law.

• Age verification was virtually nonexistent. Most sites simply had a statement on the home page, or hidden in a disclaimer or under Frequently Asked Questions, stating that a purchaser must be a certain age to buy cigarettes. Some asked for a simple check-off that the buyer was over 18.

• This study clearly demonstrates that efforts to restrict illegal cigarette sales via the Internet are ineffective, that billions of dollars in taxes are going uncollected, and that legitimate sellers of tobacco products in the U.S. face unfair competition from unscrupulous online purveyors who are scoffing at U.S. laws and tax requirements.

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• Organizations Call on U.S. Senate to Pass Legislation Preventing Tax‐Evading Online Cigarette Trafficking (PDF) 

Representatives of law enforcement groups, public health organizations and trade associations today gathered on Capitol Hill to urge the Senate to pass S. 1147, the Prevent All Cigarette Trafficking Act of 2009 (PACT Act). This legislation will help combat online cigarette sales that have robbed hundreds of millions of dollars in tax revenues from the states and that undermine state laws that prevent youth access to tobacco products. This bill closes gaps in current federal laws regulating “remote” or “delivery” sales of cigarettes and smokeless tobacco products.

These organizations were joined by Sen. Herb Kohl (D‐WI) and Rep. Anthony Weiner (D‐NY), advocates of combating illegal cigarette sales. Numerous stakeholders have worked with Sen. Kohl through the years to pass the PACT Act, which was passed in the House of Representatives this May.

“The PACT Act will strengthen our tobacco laws to ensure that law enforcement has the tools they need to investigate and prosecute cigarette traffickers, said Sen. Kohl. “Each day we delay its passage, terrorists and criminals raise more money, states lose significant amounts of tax revenue, and kids have easy access to tobacco products sold over the internet.” . . .

Organizations represented at the press conference included the National Association of Convenience Stores, American Wholesale Marketers Association, National Black Police Association and Campaign for Tobacco Free Kids. . . .

The American Wholesale Marketers Association also released its latest findings from a study it conducted examining the prevalence of illegal Internet cigarette sales and the cost to the country. In the study AWMA found the cost to states in illegal cigarette sales could be upwards of $5 billion per year, and that with online sales there is almost no age verification at the time of purchase.

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• Coalition Pressures Senate to Pass Cigarette Anti-trafficking Bill  

The illegal sale of tobacco products through the Internet leads to tax evasion and tobacco use by young people, members of Congress and merchants said Tuesday.

The Coalition to Stop Contraband Tobacco urged the Senate to pass a bill that would address the issue. The bill is scheduled for a vote Thursday by the Senate Judiciary Committee.

"Each day we delay its passage, terrorists and criminals raise more money, states lose significant amounts of tax revenue, and kids have easy access to tobacco products sold over the Internet," said Sen. Herb Kohl, D-Wis., who sponsored the Prevent All Cigarette Trafficking Act.

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• CORCORAN: Ottawa's fruit-flavoured tobacco bomb 

The result was Bill C-32, officially titled The Cracking Down on Tobacco Marketing Aimed at Youth Act -- a misnomer if ever there was one. Today, a year later, what Mr. Harper's Conservatives have delivered instead is an over-the-top law that threatens a global trade war and another bonanza for Canada's already out-of-control contraband cigarette market.

The trade-war potential gathered momentum earlier this month when, according to Inside US Trade, the United States joined Argentina, Mexico, Switzerland, the European Union and other nations in opposition to Ottawa's new anti-bubble-gum tobacco law. At a meeting in Geneva, the nations said Canada's law would restrict trade in regular tobacco products to the benefit of Canadian tobacco producers.

The more immediate impact of the law, however, is a ban on the sale in Canada of virtually all brands of U.S. cigarettes. Guess where that leads? The logical result of a ban on legal imports of Marlboros and Winstons is new demand for illegal supplies through the burgeoning Native-dominated contraband market, a tax-evading multi-billion-dollar industry that already accounts for between 33% to 50% of the Canadian cigarette market. . . .

While this may look like another case of unintended consequences run amok, it more likely is part of deliberate scheming by Health Canada officials and others who are consciously using fruit-flavoured smokes to create a global tobacco trade bomb against the U.S. and tobacco industries in Europe, South America and Asia. . . .

Still, Bill C-32 became law, even though Senator Segal abstained over the trade issue. As a result, Mr. Harper's opportunistic election gimmick, aimed at curbing the use of flavoured tobacco to children, will do nothing to protect children. By further enhancing the power and scope of the contraband market, it will only increase the supply of illegal cigarettes, a prime source of tobacco to the young. At the same time, the government has launched a protectionist scheme that threatens a trade conflict.

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• Arrested for selling false cigarettes mixed with bunny scat 

The Guardia Civil in Tenerife have arrested 12 men who formed an organized gang who smuggled fake cigarettes into the Canary Islands. The cigarettes, made in China, were found to contain a high proportion of rabbit excrement which padded out the tobacco. The cigarettes were sold in bars and shops mainly in the south of the island.

Operaci�n Chester is the largest counterfeit tobacco operation this year in Spain. One and a half million packets of false cigarettes with a street value of almost five million euros were seized. It is not known how many false packets have been sold but the value is expected to be millions of euros.

The operation started after the Guardia Civil started to receive a series of complaints from smokers about "terrible" cigarettes. . . .

The false cigarettes were made in China before being shipped to Spain via the UAE. Apart from the rabbit excrement, they also contained dangerously high levels of nicotine, CO2 and heavy metals.

Amongst the arrested was a corrupt customs officer who allowed the shipments into the Canary Islands.

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• Organizations Call on U.S. Senate to Pass Legislation Preventing Tax-Evading 

Representatives of law enforcement groups, public health organizations and trade associations today gathered on Capitol Hill to urge the Senate to pass S. 1147, the Prevent All Cigarette Trafficking Act of 2009 (PACT Act). This legislation will help combat online cigarette sales that have robbed hundreds of millions of dollars in tax revenues from the states and that undermine state laws that prevent youth access to tobacco products. This bill closes gaps in current federal laws regulating "remote" or "delivery" sales of cigarettes and smokeless tobacco products.

These organizations were joined by Sen. Herb Kohl (D-WI) and Rep. Anthony Weiner (D-NY), advocates of combating illegal cigarette sales. Numerous stakeholders have worked with Sen. Kohl through the years to pass the PACT Act, which was passed in the House of Representatives this May.

"The PACT Act will strengthen our tobacco laws to ensure that law enforcement has the tools they need to investigate and prosecute cigarette traffickers, said Sen. Kohl. "Each day we delay its passage, terrorists and criminals raise more money, states lose significant amounts of tax revenue, and kids have easy access to tobacco products sold over the internet."

"We must crack down on the illegal sale of tobacco, which gives terrorists and criminals the ability to raise more money," said Rep. Weiner. " . . .

Organizations represented at the press conference included the National Association of Convenience Stores, American Wholesale Marketers Association, National Black Police Association Campaign for Tobacco Free Kids and American Legislative Exchange Council.

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• Cigarette sales plunge since Florida's tax increase 

Cigarette sales have fallen sharply across Florida since a $1-a-pack tax increase took effect July 1, plunging nearly 50 percent in some counties.

Statewide, cigarette sales that regularly topped 100 million packs per month dropped to 73 million packs the month the tax became law. Since then, sales have inched back to around 78 million packs but remain well below prior levels.

To supporters, the sagging sales are evidence that the tax is meeting its public health objective: getting smokers to quit. Critics, however, say many people are simply buying their cigarettes elsewhere or switching to items that aren't subject to the higher tax, like small cigars.

The state charge on cigarettes is now $1.34, compared with the 34-cent tax that had been in place since 1990.

"It's working exactly the way it was designed to work. People are quitting," said

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• Irish seize 12 million cigarettes, arrest smuggler  

Irish police and customs officials said Tuesday they have uncovered two cigarette-smuggling plots and seized more than 12 million cigarettes shipped from Spain and Vietnam.

The legal street value of the cigarettes was euro4.8 million ($7 million), including euro3.7 million in potential tax revenue to Ireland, said customs spokeswoman Sarah Cox.

The country imposes the highest tobacco taxes in the European Union, making it a smugglers' paradise for thousands involved in shipping and selling illegal imports and counterfeit cigarettes.

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• EDITORIAL: Illegal cigarettes can't be ignored  

It is in society's obvious interest, then, to crack down on the rampant trade in contraband cigarettes. And, in fairness, some efforts have been made. Brennan and Benzie report that a law enforcement trial project, in which U.S. and Canadian officers worked side by side this summer on Canadian Coast Guard vessels, led to more efficient cross-border patrolling. Such joint operations should become permanent.

Other ideas include restricting raw materials for large-scale cigarette-making to those with a valid manufacturers' licence and working with native groups to bring about a First Nations tobacco tax equal to the province's. It might also help if government did more work to promote alternate – and legitimate – economic pursuits in First Nations reserves, thereby easing dependence on illegal activities.

The illicit tobacco trade didn't appear overnight, and it won't be easily eliminated. But more could surely be done to stanch this dirty business, to protect both government revenues and public health.

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