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The 13th World Conference on Tobacco OR Health

Building capacity for a tobacco-free world

July 12-15, 2006, Washington, DC, USA

Friday, July 14, 2006 - 1:30 PM

Measures to Prevent Illicit Tobacco Trade

Rob Cunningham, BA, LLB, MBA, Canadian Cancer Society, 116 Albert Street, Suite 1010, Ottawa, ON K1P 5G3, Canada

Governments should implement comprehensive measures to prevent illicit tobacco trade, in order to maximize the benefits of a high tobacco tax strategy.

Tobacco sales to consumers by Internet or mail order should be banned. Canada and several US states have done this.

Other potential contraband prevention measures include: (1) prominent tax-paid markings, with covert/overt features; (2) a full tracking and tracing system (building on California/Brazil/Malaysia experience); (3) taxes at point of production/importation instead of retail; (4) export taxes; (5) tobacco-specific licences for farmers, manufacturers, importers, wholesalers, transporters, retailers, together with record-keeping and reporting requirements, and public disclosure; (6) strict liability for manufacturers/importers for products ending up in an illicit market; (7) substantial forfeitable bonds for tobacco manufacturers/importers; (8) prohibiting the supply of raw materials to unlicensed manufacturers; (9) banning duty-free sales/imports; (10) effective controls on tax-reduced sales to aboriginals, military, diplomats, etc.; (11) package markings to indicate tax-exempt/reduced status; (12) markings directly on cigarettes; (13) significant potential penalties, including fines of 3–10 times the tax evaded, prison terms, confiscation of proceeds of crime, and suspension of licence/ability to supply legal market; (14) meaningful search and seizure provisions; (15) meaningful enforcement resources; (16) interjurisdictional cooperation among enforcement officials; (17) prohibiting sale of empty cigarette cases.

The process for an FCTC Protocol on illicit trade has been initiated and has significant potential. A Protocol might include an internet sales ban.